Without a doubt, the coronavirus pandemic has had an impact on everyone. For almost a year, the pandemic has been raging all over the world. What starred in China has now spread to the rest of the planet, leading to a pandemic that has created a public health crisis the likes of which have not been seen in more than 100 years. In addition to an unprecedented health crisis, this pandemic has also created an economic emergency. Therefore, there are many people who are wondering what impact does pandemic is having on the financial market. There are a few key points that everyone has to keep in mind.
The Impact of Falling Interest Rates All Over the World
First, it is important to point out that many countries are trying to find ways to prop up their economies. They understand that their economies are struggling right now and they want to make it easier for people to borrow money. For example, the Federal Reserve reduced its interest rates to zero and removed the reserve requirement for its banks.
Stock Markets All Over the World Continue To Struggle
Even though the stock markets in the United States appear to have recovered, it is not an accurate reflection of what is actually going on with the economy. There are plenty of other financial markets that are continuing to struggle. Due to the pandemic, many businesses have been forced to alter their operations and close their doors. In this manner, their revenue streams have dried up and they are missing their projections. As a result, the value of their stocks continues to fall.
On the other hand, there are many people who are very concerned about the United States stock market. When looking at a money market graph, there is no reason for their stocks to continue to climb other than the fact that the government continues to print money. This, combined with job numbers that do not look great, has people wondering if a stock market collapse is coming in the near future.
The Continuing Wildcard of a Potential Vaccine
If there was a potential endpoint inside for this pandemic, then it is likely the financial markets would respond better. Unfortunately, there is no endpoint inside. There continues to be this soft target of sometime in 2021 for a vaccine. On the other hand, many people do not know how effective this vaccine is going to be. They also do not know when in 2021 this vaccine is going to be available. As a result, the financial markets continue to struggle, becoming incredibly volatile, hinging on every update related to vaccine production.
Looking at the Future of the Financial Markets
Right now, the financial markets are still incredibly uncertain. The good news is that we understand why the markets are so volatile. The pandemic has thrown a wrench into everything. The bad news is that there does not appear to be an end in sight. Right now, everyone has to band together and support one another during these difficult times.