The US economic contraction in the second quarter was very bad, and in fact, one of the worst in US history.

The equity rally we have just experienced is the strongest 50-day rally on record. It is also probably one of the most hated rallies.

Diversification, a key element of risk management, has been deteriorating within the S&P 500 index.

in countries where the health situation is generally good, consumer sentiment seems to be returning to normal perhaps faster than expected.

Will the dire scenario reflected in market prices materialize? One thing we can be certain about is that economic uncertainty is high.

Easy monetary conditions are helping. According to many measures, we are enjoying the most accommodative monetary conditions on record.

Following the very difficult month of March, global financial markets rebounded in April. The benchmark US S&P 500 equity index is up 12.7%.

After the initial impact and market reactions, we have probably entered the second stage of this market crisis

Some people have asked: how is it possible that the benchmark S&P 500 index has rebounded nicely from the March lows?

From a macro perspective, the important point about all this is that it highlights the extent to which economic demand has been damaged

Some investors will say that it might be unwise to ignore the old Wall Street adage “Don’t fight the Fed”.

Given the progress made in many countries on virus containment, there is increasing talk about exit strategies from the lockdowns.

After we have seen stabilization/moderation in the spread of the virus in China and Italy, we are now seeing a similar pattern in Spain.

China Caixin Manufacturing PMI index, a gauge of manufacturing activity in China, rebounded sharply in March from February’s abysmal levels.

Very often, the market bottoming process involves short ‘bear-market rallies’.

We continue to remain vigilant, but we are also keeping an eye open for new opportunities that lower prices are now presenting to us.

A sustained turnaround in financial markets will only come, I believe, once there are signs that Coronavirus is starting to fade.

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