Coronavirus: impact and analysis

Infographic: Over the long term, stocks haven’t been derailed by recessions or epidemics

19/05/2020
Over the long term, stocks haven’t been derailed by recessions or epidemics

Summary

It’s understandable to worry about the coronavirus pandemic and the impending global recession but, historically, the equity market has overcome each temporary setback caused by recessions and disease outbreaks.

It’s understandable to worry about the coronavirus pandemic and the impending global recession. Although the past is not an indication of the future, historically, the equity market has overcome each temporary setback caused by recessions and disease outbreaks, as shown in this chart of S&P 500 Index performance since 1945. Regardless of short-term market movements, investors should consider sticking to their long-term investment strategies.

Previous recessions and epidemics caused only temporary setbacks for US stocks
S&P 500 Index (1945-2020)

Infographic: Previous recessions and epidemics caused only temporary setbacks for US stocks

Source: FactSet. Data as at 31 March 2020. Past performance is no guarantee of future results. It is not possible to invest directly in an index.

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China is positioned to lead Asia’s economic recovery from the coronavirus

by Christiaan Tuntono | 10/06/2020
China is positioned to lead Asia’s economic recovery from the coronavirus

Summary

The coronavirus pandemic applied a sudden brake to China’s growth story, as it did to most economies around the world. But there are signs that China could be ready to lead the way out of the downturn and resume its long-term growth trajectory.

Key takeaways

  • As the first country to face the coronavirus crisis, China looks set to be the first country in Asia to emerge from it, as business activity returns to the levels seen before the outbreak
  • The Chinese government has shown itself willing to make the necessary policy interventions to keep the recovery on track and ensure the country resumes its long-term growth trajectory
  • China and its nearest neighbours, such as Taiwan and South Korea, are best positioned for recovery, while south and south-eastern Asian economies face further challenges
  • Continuing trade tensions with the US still threaten to hamper China’s recovery, but stronger regional trading relationships should limit the impact
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