Markets will return to highs by early next year – JPMorgan
Equities Markets JPMorgan Says Markets Recover By Early 2021.
The price collapse is caused by fear
Incentive packages and measures to contain the spread of the virus will help the economy recover over time.
International consortium of news organizations developing transparency standards.
Dubravko Lakos-Bujas, chief US equity strategist at JPMorgan, said markets could recover by next year and even surpass previously set record highs. The reversal will entirely depend on containment of the coronavirus.
Lakos-Bujas gave such a forecast, even despite the further collapse of shares on Friday. Last week was the worst for the Dow Jones Industrial Average (Dow) since October 2008: the index closed 40% below record highs.
Why stocks will resume growth?
Lakos Bujas claims the stock is now heavily oversold, leaving room for significant gains. Widespread fears in the market have undermined investor confidence in the possibility of earning income in the current environment.
However, if the US government can accept a sizable stimulus package, these losses could be quickly offset. This, of course, depends on whether the government can “flatten the curve” of the disease to reduce its impact on the health system..
“Indeed, stock markets around the world are down 30-50% from recent highs … but we forecast an asymmetric recovery profile for stocks, with the odds of gaining over the next year being significantly higher than the likelihood of a decline,” Lakos-Bugas said.
What will happen to bitcoin?
The same reasoning applies to bitcoin as to the stock markets. The general financial conditions that drove prices up to $ 10,000 have changed a lot.
However, it is possible that the market is oversold. Market fear, unemployment problems and disruptions in the global economy have led to the current recession. However, investors who bought Bitcoin below $ 4,000 were rewarded with significant increases above $ 6,000.
Lakos Bujas suggests markets will rebound thanks to substantial economic stimulus from the US government, along with measures to contain the coronavirus. If these measures are taken, then investors are likely to increase the volume of purchases, which will lead to higher prices in these markets..
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