Markets react positively to governments’ plans to ease lockdown restrictions in the coming weeks as some countries get ready to reopen their economies.
According to data released by John Hopkins University the novel coronavirus has now infected more than 3 million people around the world. Of those, more than 200,000 have already lost their lives and many more are hospitalized in critical condition.
Governments ease lockdown
Governments around the world have placed their countries under various forms of lockdown in a desperate effort to curb the spread of the deadly virus. Lockdown has forced businesses to close and social distancing has had a dramatic impact on consumer spending habits. Many have lost employment and markets have reacted negatively to the widespread economic damage that has been inflicted by the various restrictions put in place over the last several weeks.
But now, it is becoming apparent that some countries have passed the peak of infection and others have been successful in containing the outbreak. Governments are looking at ways to ease their economies out of lockdown, which has given markets a boost in recent days.
Overnight in the US, the Dow Jones Industrial Average closed 358.51 points higher at 24,133.78 — its first close above 24,000 since April 17. The S&P 500 was up by 1.5% closing at 2,878.48 while the Nasdaq Composite increased by 1.1% to end the day at 8,730.16
A reopening of the economy in the U.S. in some states is also lifting investor sentiment.
The U.S. dollar index, which tracks the greenback against a group of other currencies, was at 100.131 after dipping below the 100 mark previously.
The Japanese yen changed hands at the end of the trading day at 107.26 to the dollar after rising above 107.4 yesterday, while the Australian dollar traded at $0.6438 after rising from levels below $0.642 yesterday.
JPMorgan & Irvine Humphries recommend cautious optimism
But analysts at JPMorgan Asset Management and Irvine Humphries Global have warned that it is best to regard Equity-markets with cautious optimism at this time. It is too soon to predict how well economies will react to easing of restrictions.
An analyst at JPMorgan Asset Management stated that the economic recovery will likely take some time to be evident. The economy will not be able to restart as suddenly as it was stopped.