The forward-looking nature of the stock market means that investors are looking to future events which will act as markers for how they might feel about buying or selling shares.

We saw this with data on coronavirus cases in China and signs that the growth in death rates had peaked. Even though there were still people dying from the virus, a reduction in the growth rates was enough to make investors more confident about life returning to normal, reigniting appetite for equities.

Similar analysis has been applied to Europe and the market is certainly looking closely at the US ‘curve’ for coronavirus deaths.

The next event in the coronavirus cycle, from the markets’ perspective, is when and how businesses will resume activity. Many large cities in China are now getting back to work, albeit with the widespread use of masks acting as a reminder that the virus could still be lingering.

In Europe, millions of people are expected to return to work in Italy on 4 May and its procedures and execution, as well as lessons learned from China, could act as a blueprint for how the UK manages to get back on its feet.

The markets will be watching every move and achievements or failures will have a direct read-across to sentiment towards stocks.

Investors are eager to work out how companies’ earnings will be impacted and which ones stand the best chance of recovering. They will be buying and selling ahead of these companies telling us how they’ve done.

We’re already seeing signs of UK businesses slowly getting back to work, albeit in a limited capacity. Housebuilders Persimmon (PSN) and Vistry (VTY) were back on site at start of this week and Taylor Wimpey (TW.) says it is ready to pick up tools next week.

Shares in Taylor Wimpey, in particular, have sparked back to life on this news. Equally as important, is that it continued to sell homes during the lockdown and that there have been minimal cancellations.

Renewed activity among housebuilders is likely to stir interest in other parts of the construction sector such as brick makers and so we wouldn’t be surprised to see shares start to move up in that sector as investors speculate about near-term revenue generation.

Along the same theme, one of the worst performing sectors in the past week, at the time of writing, has been travel and leisure. That’s because we’re hearing from many commentators about how the removal of the lockdown is unlikely to see everyone rush back to pubs and restaurants immediately, even though we would all appreciate a drink and a nice meal.

Numerous surveys about people’s intentions would suggest the nation is very nervous about social interaction once lockdown restrictions are removed. Leisure outlets could be off limits to the public until much later in the year and foreign holidays could be off limits until 2021, hence why investors seem to be going off the broader travel and leisure sector (despite it enjoying a recovery rally a few weeks ago).

Sentiment towards sectors (good and bad) could easily change on the slightest bit of coronavirus-related news, so it does pay to keep abreast of what’s happening.

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