As COVID-19 cases surge and many restrictions on various types of economic activity are reimposed, stock markets are seeing an upswing as well. Scotiabank’s Vice-President and Head of Capital Markets Economics Derek Holt explains why the markets aren’t reflecting what’s happening in the main street economy.
Markets tend to be forward looking, and there is optimism due to positive initial results from coronavirus vaccine makers, he said, while, some sectors such as tech and health have not been negatively hit by the pandemic.
However, stock markets may have an overly rosy outlook right now as a successful vaccine will need to obtain regulatory approval before being produced, distributed and administered, Holt notes. It won’t be until the second half of 2021 at the earliest before these things will be in place, he said.
"It's going to be a bumpy ride for investors, certainly along that path.”
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