Global | Is there momentum in the markets?

Over the summer, the optimism in the financial markets held firm. This was despite the confirmation of the unprecedented collapse of economic activity in the second quarter of 2020 — the result of the drastic measures taken on a global scale to contain the spread of COVID-19.

Key points

• Key points:
• What have been the driving forces behind the momentum in the markets? The driving forces have remained virtually unchanged since May: fiscal policy and large central bank’s interventions.
• All of these measures have facilitated the gradual easing of financial tensions, and growth in investor preference for higher-risk assets.
• Furthermore, at the sectorial level, there has been rotation into cyclical stocks.
• However, market-based indicators show some divergences that show concerns persists.

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