Recovery prospects outweigh the negatives

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Thu, May 28, 11:19 PM (8 hours ago)

Recovery prospects outweigh the negatives

Michael Mackenzie
May 28, 2020
Prospects of economic recovery have certainly registered across global equity markets during May. European equities are pushing higher and the S&P 500 is established above 3,000 points. Whether the trend is sustainable is very much a topic of debate at the moment.

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Analysts at Goldman Sachs acknowledge that “a shift towards positive cyclical growth momentum is usually very supportive for risky assets” but they also flag a list of concerns. There is the risk of a second wave of Covid-19, while the bigger issues potentially looming down the road are “the potential second-round effects from the lockdown, such as a pick-up in bankruptcies, defaults and a continued weak labour market”.