Where are we in the market recovery?
In the third webinar of our ‘In conversation with Canaccord Genuity’ series, we spoke to Tony Dwyer, Canaccord Genuity’s Chief Market Strategist based in New Jersey and a regular on CNBC and Bloomberg, fondly known as ‘one of Wall Street’s biggest bulls’. Tony explained what investors should take from the current action of central banks and what we can expect markets to do when a vaccine finally arrives.
Watch the webinar here:
This video was recorded on Monday 15 June 2020.
The clear disconnect between what’s been happening in markets compared to the real economy has left many investors feeling bemused. While we’ve seen a material and record recovery in markets, we’ve seen rising unemployment and declining GDP growth. However, according to Tony, it’s not unique to have the economy seemingly getting worse when markets are getting better. And the reason for it? The extraordinary monetary and fiscal stimulus we’ve seen.
But should investors worry about the repercussions of huge amounts of monetary stimulus? Tony says that the Federal Reserve (Fed) is telling us not to worry right now. And while “at some point there will be tax consequences, that time is not now”.
In terms of the outlook for the economy and markets, Tony is positive. Although he believes we can expect a very slow recovery, when a vaccine arrives, it will be like a ‘light switch’ because there’s so much money in the economy that can then be put to work. Using a recent example of him unable to replace the family hot tub because they are sold out from everyone ‘staycationing’, he explains the economy is still moving but “when you turn that light switch on, it’s going to move a lot faster”.
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IMPORTANT: Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. Past performance is not a reliable indicator of future performance.