Will the market stabilise in the second half of 2020, what experts say?

Will the market stabilise in the second half of 2020, what experts say?

The boredom clearly seems to be sketched on the faces while you struggle to work from home, adapting to the new norm of social distancing. As looking through the balconies to find the deserted alleys remains the only interaction with the outside world, the eerie stillness envelops the hearts. The ports being sealed, the flights cancelled, and the borders closed, it looks like the world no longer remains a global village. As the distance between the nations, cities and even the people appear to be stretching, the cravings for humdrum and commotion that once we grumbled about have heightened.  

The life seems to be caged in shackles, and the hazy vision amidst the deadly Covid-19 scenario restricts our every endeavour. Whilst the health professionals and drug researcher together battle against the medical emergency, the economists brace themselves for Tsunami as the waves of market downfall crashes upon the nations. The world economy stands to be at terrible risk at the current time when the blue-collar workers dust-off their hands, industries shutters their din and people garner a single-centric conservative focus. 

Looking at the detrimental epidemic cascading ghastly upon the global economic scenario, the governments, along with the world agencies, are taking up various measures to release the abducted freedom of the world. IMF managing director Kristalina Georgieva highlighting the immeasurable human cost and negative growth outlook for 2020 forecasted recession of the scale similar to the previous global financial crisis. 

With the cases exceeding to over 0.37 million worldwide on 24 March, the S&P ASX 200 fell by around 1,948 points or 29.1% on a YTD basis. While IMF plans to disburse 50 million USD to emerging and low-income markets, many governments announced a fiscal package to support the people in the hours of need. The Australian Government has released three stimulus packages all directed to ensure that economy sails smoothly amidst the brimming storm. The central banks across the different countries through liberalising the fiscal policies have joined the bandwagon to prevent the economic fortress from falling. 

  Source: ASX

Despite the world together embarking on the quivering journey against the epidemic, the uncertainty yet clouds our very minds. While the duration of the pandemic still remains an enigma, the growing dilemma amidst such incoherent situation demands calculated investment moves. Even the experts seem to be divided on their notions regarding the future state of affairs in the stocks market. A few optimistically expects the bounce-back, some fears the long-term economic upheavals and many specialists provides investment suggestions. 

Considering the relevance of the sound knowledge in the stock market, let us see what the experts have to say about the future market prospects

A gleaming hope for future

Head of the portfolio strategy at Evercore ISI, Dennis DeBusschere chose to highlight on the buying opportunities in the stock market at lower prices amidst the outbreak generated uncertainty. He stressed on the short-term volatility of the market and suggested to include stocks with strong fundamentals

The Global Investment Strategist at ProShares, Simeon Hyman citing uncertainty to be the significant reason of volatility highlighted that while investors are not aware of the ultimate impact of Covid-19, the history provides positive hope that the tough time would pass and the market would recover. 

In the last two months, the stocks have shown a sinusoidal pattern that rekindles optimism amongst the investors. On 25 March 2020, the shares rallied as S&P/ASX 200 rose by 262.4 points. The uptrend movement in stocks resonates with the statement of Bahnsen Group’s CIO, David Bahnsen, who a few days back highlighted the ‘utter silliness’ of the investors trying to time the market entry and exit. 

Or maybe a depressive year ahead? 

While many experts refrained from abandoning positive prospects in the current bear market, Vicky Redwood, who works as a Senior Economic Advisor at Capital Economics highlighted the vulnerability of the complex and extended supply chain. He cited coronavirus as one of the factors that would propel decoupling between China and the West, thereby accentuating the de-globalisation process. 

The Treasury Secretary Steven Mnuchin warned that coronavirus could lead to around 20% unemployment in the U.S, double than 2008 financial crisis signifying terrible economic worries. 

Experts Suggestions

For the investors with high-risk appetite, Amit Jain, CEO & Co-Founder, Ashika Wealth Advisors suggested opting for the mid-caps while the others can invest in mid-caps through mutual funds. 

While the confusions hovered over the stock market, the experts provided critical opinions to protect the investors. Stefan Iris said that although people were in a wavering situation that may continue for weeks or months, the investors should ‘stay-put’ and avoid cashing out of their stock market position.

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