As we write the FTSE 100 has reclaimed the 5,700 mantle as it continues to bounce back from the damage wrought by the coronavirus crisis.

The key factor behind the rally appears to be some evidence that countries in Europe are beginning to ‘flatten the curve’ of infections and deaths.

Often the stocks which led us into a bear market are the ones to lead us out – so it is notable that travel-related shares are in demand.

Also underpinning the rally are signs of life in various areas which tend to be good indicators on the health of the world economy. Transportation-related indices are beginning to recover, and commodity prices have stabilised, while junk bonds are also rallying.

Markets are inherently forward looking and attention is likely to turn to how countries can exit lockdown conditions and effectively take the global economy off pause mode.

As UBS chief investment officer Mark Haefele observes: ‘We believe it is too early definitively to call a turn in the pandemic, and investors should continue to expect heightened volatility. However, the rebound offers a further reminder of the importance of staying invested.’

Some encouragement may be taken from China which on 7 April reported no deaths for the first time since it started publishing daily figures in January.

While there are some question marks about the veracity of the Chinese data the trend still looks positive despite lockdown conditions being eased (but not removed entirely).

The incubation period of the virus means it may be at least another week before we can judge if the cautious exit strategy is being delivered without a significant second wave of cases.

In Europe determining the exact trend of the outbreak is also tricky given reporting lags but social distancing does appear to be having an effect.

Shore Capital analyst Adam Barker notes the situation is currently different in the US. He says: ‘The most recent situation reports from the WHO (World Health Organisation) continue to show that the USA is becoming an increasingly important driver of new case growth, as the available evidence continues to suggest that new cases are falling in Europe.

‘The USA’s case burden is now twice that of any other country and given its mortality chart we expect a tough week for the country where hospitals will come under severe pressure.’

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