Friday’s dip after a massive rally through last week shows there is a lot further to go before any durable recovery in equity markets can be expected, as more negative news is likely to be reported in the coming weeks. Yet there are encouraging signs from Italy and China that we are slowly turning a corner. But markets will likely remain volatile in both directions for the foreseeable future.
- Some signs of progress are beginning to emerge in the health statistics from Italy
- However, equity markets remain jittery as investors try to absorb rapidly developing fiscal and monetary responses to the crisis
- Economic activity in China will be a key indicator of where things go next
