Despite the growing number of Coronavirus cases, the economic recovery of both the US stock market and the Canadian main stock index started to show towards the end of June. This is after all markets in the world took a hit from a global pandemic that saw world economies almost shut down.
Even though infections are still surging in sections of the US, there was some hope when Gilead Sciences reported that Remdesivir helped decrease the mortality rate in patients. The positive news is among the factors contributing to the American and Canadian economic recovery amid these unpredictable times. In the recovery, the rate of unemployment in Canada fell in June after the US added almost 4 million jobs as the economy picked up.
The technology sector has been behind the market recovery. The sector has enabled people to work from home and shop online. But the recent recovery has also profited the banking and energy sectors.
The energy sector received a boost after the International Energy Agency heightened its 2020 demand forecast. The move helped Canadian energy companies like Enerplus Corp. and Vermilion Energy Inc, whose shares went up in the stock market.
The health sector was propelled by Canopy Growth Corp’s shares climbing by more than 8%. The banking sector was boosted by the rise of shares of various banks in Canada and the US. Some of the banks that gained in the market include the Laurentian Bank, Bank of Montreal and Bank of Nova Scotia.
The technology sector fell with Lightspeed POS Inc. and Blackberry Ltd taking a hit in the market. Materials plummeted despite gains by forestry companies as the prices of Gold fell. However, the prices of Gold remained above 1,800 USD an ounce for five straight weeks. Although some analysts suggest that gold is appreciating because of fears of inflation, resulting in colossal monetary and economic stimulus, some are less hopeful about the prized metal.
According to other economic experts, once the fear is detached, or when there is a vaccine for the virus, gold could lose the fear premium it currently has. The North American markets will need a catalyst that will help move the markets to the next level and regain the all-time highs.
As the economy recovers, it was revealed that most businesses had been negatively affected and reached low levels experienced during the recession in 2008-09. Therefore, the businesses are more careful as they rehire.
As the North American economies tries to recover, a lot depends on the scientists on the labs working on the way to deal with this global pandemic. Otherwise, the current state of events is so unpredictable that businesses and investors are more guarded in their risk-taking.
The future is not very dim, as there has been positive news from various quarters. Companies are also finding ways to navigate through these unique times to stay in business.
For instance, applying new protocols in workplaces to allow workers that can’t work from home to continue working without risking their health. For those who can work from home, the companies will have to invest in proper infrastructure to help employees work remotely.