Due to the increase in coronavirus cases throughout Europe, and America, stocks have been traded at a very subdued level since Tuesday. There has been a threat of a new wave that might be even more dangerous than the previous one. And that is precisely why the Spanish government is already bringing in lockdown measures, and the British government has issued rules for bars to close by 10 pm. And such extreme measures would definitely create certain changes for stocks throughout the USA.
The Dow Jones Industrial Average rose 0.2% after it had suffered a decline of 509 points. On the other hand, S&P 500, along with Nasdaq made several early gains to get back on track. Ben Kirby, the portfolio manager of Thornburg Investment Management mentioned that this is the highest the market would go this year. Hence, it was advisable that investors decide to set up camps on the multi asset hills. He didn’t sound too happy, but there was no other option to fall back to. According to the management institution, the market had exhausted all the highs that it could.
Kirby also stated that stocks would be much preferable over bonds, and it would also be useful to maintain a level of cash that was definitely above average. He also expected a much higher rate of volatility as the country trudged towards election week. And all this would ensure that enough buying opportunities were provided to the investor- with Thornburg already coming off as a healthy risk-off. Kirby further mentioned that Thornburg was completely ready for dividend-paying, high-yield stocks, as stocks and sectors did have an important role to play in the present market. Although under-performing in 2020, high-yield stocks have always been the trump card in broader markets.
He added that high-yield stocks usually came off as a big opportunity for investors looking at the bigger picture. The stocks had quality, and could easily be used for compounding companies engaged in growing and sustaining dividends. And as far as the present market goes, such a sector should be maintained at all costs- for income from bonds has become increasingly scarce in this economy.
The Stock Markets
American stocks had modest gains from early trading, with both the S&P 500 and Nasdaq climbing the ranks slowly. On the other hand, stocks in Europe saw much better growth, as they went beyond their worst one-day performance in three months. But we couldn’t completely blame the European markets to be looking at their own interests as they tried imposing bigger restrictions to control the ever-rising coronavirus cases.
The Buzz Around Stocks
Elon Musk recently tweeted that the Battery Day or Tesla would be announced on Tuesday, but it was quite evident that they would not be reaching major milestones in production. In a different scenario, the stocks of the British pound started to rise after reports claimed that Michel Barnier was heading towards London to espouse informal talks that would help with the financial situations in the entire continent.
As far as we can predict, the stock markets haven’t been having a field day due to coronavirus cases rising daily. Nonetheless, markets have been able to conceal their damages as the crisis exacerbates.