DM Monitoring
NEW YORK: For equities, 2020 was an unprecedented year featuring a deadly pandemic, a brutal recession and wild market moves.
Heading into 2021, market strategists saw upswing potential ahead on expectations for a vaccine-assisted defeat of COVID-19 as well as a broadening recovery, warning of possible volatility as uncertainties remain. “The words I most associate with the 2020 equities market are that it was a year of ‘extreme extremes’ in that COVID-19 hovered over the global economy and global markets in ways that affected every aspect of business and social activity,” Quincy Krosby, chief market strategist at Prudential Financial, told Xinhua in a recent email interview, reflecting on the past year. “Extreme global monetary and fiscal responses, particularly from the Federal Reserve,” and extreme efforts and a rapid response from the biotech community as they began developing vaccines in historical and record time, have “allowed markets to look forward to a 2021 global economic recovery,” she said.
Indeed, COVID-19 almost dominated the narrative in 2020. The global economy paused virtually overnight and countries across the world grappled with the fight against the virus. Equities crashed between mid-February and late March in a pattern that many referred to as an event-driven bear market. The downside was sharp, sudden and scary that saw the S&P 500 slump nearly 34 percent in only 23 trading sessions, also its fastest-ever dip into a bear market.
Markets managed to bottom out and make a turnaround in the backdrop of swift and aggressive actions by central banks to cut rates and establish lending programs, and enormous fiscal government support. In addition, the recent progress in COVID-19 vaccines and global vaccine rollouts have lent support as investors priced in the lasting economic recovery that vaccines would confer.
