GLOBAL STOCK MARTS TO END 2020 BELOW PRE-COVID HIGHS: REUTERS POLL
Global stock markets are forecast to close the year below their pre-pandemic highs, but will still keep alive for at least another six months, a bull run that is defying a somber economic outlook across much of the world, Reuters polls of market experts found.
Share prices have surged as much as 57% since hitting a bottom in late March, as traders and investors quickly switched their focus from what is sure to be the deepest economic recession on record to how swiftly the world may recover, Rahul Karunakar reported for Reuters.
But all the 17 indexes in Reuters polls of over 200 equity strategists across Asia, Europe and the Americas taken Aug 12-25 were forecast to end 2020 below their pre-COVID-19 highs. Fifteen were seen ending the year lower than their 2019 close. While the latest findings were slightly more upbeat than those taken three months ago, the outlook for stock markets from Asia to Europe to Americas has limited upside, if any, on weak corporate earnings and economic worries. That suggests further gains will be harder to come by.
“Equity markets rebounded ... (but) as this higher starting point represents a mismatch between equity prices and fundamentals, we expect this divergence to be gradually reflected in prices,” noted Monica Defend, global head of research at Amundi Asset Management. “Aided by the still-ongoing recovery of the equity market, ex-ante returns for equity overall are set to peak in the medium term, losing steam thereafter. We maintain that the subsequent recovery (in stocks) will not happen immediately, with spurts of relief rallies not quite reaching pre-pandemic levels.” Awash with historic amounts of monetary and fiscal stimulus, 14 of 17 indexes were forecast to rise from here by year-end, with nearly 60% of about 110 strategists who had a view predicting at least another six months of the current bull run.