Stock markets determined to stay positive

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It feels like markets are looking for any excuse to feel positive at the moment. Apple’s coronavirus-linked iPhone sales warning earlier this week may have spooked investors briefly. However, markets have soon shifted their attention elsewhere,” says AJ Bell Investment Director Russ Mould.

“A small fall in the number of new coronavirus cases and apparent hopes that central banks will intervene to prop up the global economy helped the FTSE 100 to a positive start on Wednesday, up 0.6% and back above 7,400 after a robust session in Asia overnight. US futures are pointing to a higher open on Wall Street later too.

“At this point equities appear to be pricing in a short-term impact from the outbreak with a rapid return to growth once it has been contained.

“But there remains significant uncertainty about when and how the coronavirus can be brought under control and about the ability of financial stimulus and rate cuts to repair the economic damage it is likely to have wrought.

“While stocks remain resilient for now, it is notable that other indicators such as shipping indices and commodities are telling a different story. So while the MSCI World index is up nearly 3% year-to-date, oil prices, which have at least stabilised in recent days, are down more than 10%."

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