The World is Gradually Recovering, so Now is a Good Time for a Long-term Investor

If the second wave of the epidemic does not happen, then we can assert that the maximums in the number of new cases of coronavirus infection in Italy and Spain were reached on March 21 and 26, respectively. S&P 500 reached a minimum in the interval between these dates — March 23. The fact that these events occurred at about the same time is quite natural. The trend towards a decrease in the incidence rate in Europe with its open borders is very important for the whole world. It is clear why investors reacted to this factor by intensifying purchases.

The current S&P 500 is 25% above the minimum for the current decline in the closing level and about 17% below the absolute maximum. Such powerful changes occurred in just a month and a half, which is absolutely unprecedented for the US market. Other changes that have happened during this time have no analogs.

• The balance of the Federal Reserve increased from $4.13 trillion on February 19 to $5.8 trillion on March 30.
• The number of initial applications for unemployment benefits amounted to 3.283 million for the week ending March 21, compared to 219 thousand for the week ending February 22.