At the moment investments are holding value at a good rate with the inflationary spending of the Federal Reserve mostly to thank for this. However, while fears of a crash remain high, there is also a growing number of investors who believe that the situation has settled into the new reality after the excitement of the Covid19 crash. While there is certainly lots of information that is concerning, there is also some good news and possibilities that come with that.
Less Then Expected Depression In Retail Sales:
It had been a fear that demand would drop as the population found themselves unable to go out and dealing with living in a pandemic. Certain industries and sectors have experienced what a decrease in demand looks like but this has not been universal. Sales for a lot of firms have gone down but not by the feared amount and some winners have emerged. Online technology has allowed people to still purchase and receive goods and services. This has taken out some of the edge from COVID in the economy. Even in some of the worse lockdowns and outbreaks business has been able to somewhat continue to function. This has not saved every single business but is has certainly been a great help and a surprise from some estimates.
Land/House prices holding:
In some cities, the lockdown has only added motivation to people moving out. California and New York are good examples of this. However, at the current moment, housing prices have not collapsed despite the decrease. While the situation is certainly not set in stone the market has managed to demonstrate some resilience that was unexpected. Housing remains the bedrock of wider economies and mortgages make up a large percentage of the loans. While many would doubt if any lesson had been learned by Wallstreet and the banks for the moment it appears that a repeat of the GFC and meltdown of backed securities has not occurred. This gives some hope that needed changes have occurred to prevent this.
Soaring Heights Of The Stockmarket
Returning to pre Covid numbers in such a short time is stunning. While prior to Covid the US economy looked excellent many had assumed that it had pivoted to a new stage. It had been fair to assume it would take years of economic recovery before the shares could rise again. However, with some more capital being poured into the market by government entities and Federal Reserve, it appears the fuel to get the market going was found. If these gains can be preserved then firms will have a large amount of capital to expand and restore themselves. This could see a V-shaped recovery and the bounce back that everyone wants to see.
The damage done during Covid is undeniable. However, it has not been spread evenly. This is a double edged sword as nations cannot solve the entire crisis but also can use the less damaged or undamaged to help those suffering. The idea is that the often smaller undamaged areas can get the larger more damage back working to have a quicker recovery. Even if lockdowns continue this means that different parts can be shut down at different times. This may help firms that operate in different regions be able to have some profit coming in while others are paused.
Global Cooperation Continues:
Even before the current situation, there was a large amount of strain on diplomatic agreements. While this strain has not ended most governments have been focusing inwards and not to outward problems. With medical developments being closely followed by everyone there has also been remarkable global cooperation to find a vaccine. Trade also has continued despite the temptation to slam close doors and keep resources at home. Diplomatic agreements have also not stopped with some crucial steps taken in Middle Eastern peace and a few economic agreements also being signed. Some agreements are naturally on the way out but that does not mean that new more modern ones are not being crafted.
While there is a large number of concerns there is also the evidence that our systems have handled the situation quite well. This is something that cannot be hidden or denied if a full picture of the situation is to be conveyed properly. To fail to do this due to other concerns means that recovery will be hampered and maybe be delayed.