It seems that today the financial markets are finally in for a reprieve from much of the recent pessimism brought about by the coronavirus pandemic. Italy, the country that has so far had the worst experience with Covid-19 in Europe, and a higher death count than any other country, registered a drop in the new cases of the virus for a second day in a row. While it may still be too early to say, the lower numbers hint that the coronavirus pandemic might have reached its peak, at least as far as Italy is concerned.
Moreover, with the latest measures announced by the Federal Reserve and Europe, today the markets are a tad more stable. Still, there is heavy resistance among European governments regarding some of the measures that countries heavily affected by the coronavirus have suggested.
It is also worth pointing out that Covid-19 right now is spreading fast in Spain, which could soon rival Italy by the number of infected patients. In the face of the pandemic, European countries are enforcing stronger quarantines, curfews, and other similar measures. Even the United Kingdom decided to implement such measures, despite a softer response to the coronavirus previously.
Despite the continued risk and still overall unfavorable environment, today stock markets are eager to recover, and we have observed gains in Europe, Asia, and the United States.
If Congress manages to pass the so-called Phase 3 stimulus bill, which will unlock another $2-2.5 trillion of spending to fight the pandemic and offer financial support to struggling households, the market sentiment will improve.
