Question

In: Finance

Update us on your MarketWatch experience for this week. What have you learned? What challenges have...

Update us on your MarketWatch experience for this week. What have you learned? What challenges have you faced with this week's practice? Do you think Govt's Stimulus plan could ease the stock market turmoil?

Solutions

Expert Solution

We have observed unprecedented volatility in global equity markets the past week, it was mainly due to the Chinese virus outbreak.  

It was apparent from Jan-Feb2020 that a dangerous virus was spreading in mainland China and it could prove fatal to the entire global markets.

During these times the Market reacts very sharply to the daily updates and volatility becomes very high.

Last week, We have observed a stimulus package of $2.2 trillion by the US government and it was received very positively by the equity markets.

Last week, As Ridiculous as it sounds, the dow climbed out of the bear market it entered 2 weeks ago. Its really UNPRECEDENTED VOLATILITY.

The Down has risen 23% and S&P 500 by 17% since 3/23.

It looks like such a huge stimulus package can give some sort of relief to the US Equity markets.

But the main thing remains is bringing Chinese virus outbreak situation under control. If it is not under control, no amount of stimulus can give great relief.

We have also observed companies which provide
1. essential goods like Unilever Ltd, Walmart, Amazon etc.
2. Pharmaceutical & Medical equipment manufacturing companies.
3. Entertainment Companies like Netflix.

Have outperformed general market.


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