InvestNow News – 9th April – Harbour – At Home
8th April
Key points
- COVID-19 continues to spread globally with cases recently reaching over 1 million.
- Governments and central banks’ stimulus measures are helping mitigate the impacts of a sudden stop in economic activity.
- Equities posted losses as investors digested the impact of reduced economic activity on company profits, while bond yields in many countries rose as investors baulked at the large increase in bond supply which is required to fund expanding government deficits globally.
- Russia’s refusal in early March to back an OPEC production cut resulted in Saudi Arabia dramatically increasing supply to “punish” the country. Combined with reduced global demand, oil prices have fallen more than 50% year to date.
Key developments
The expanding impact of COVID-19 contributed to a broad-based sell-off in equity markets in March, with many indices retreating to bear markets. Significant monetary and fiscal policy announcements later in the month helped pare some of the losses sustained by equity investors earlier in the month. The New Zealand share market closed the month down -12.8% after being down as much as -26.5% during the month in intra-day trading. The MSCI World Index (in local currency) closed the month down -13.7%, after falling as much as -26.2% intra-month.