Oliver: Stocks no worries

Via Shane Oliver:

Share markets have had a spectacular rebound from their March lows. The rebound has been led by the US share market which is up 52% and has just risen above its February record high, making it the fastest ever recovery after a 30% or more fall. Other share markets have lagged but are still well up from their lows. This includes the Australian share market, which recently rose to its highest level since early March.

A common concern remains that the rebound is irrational. How can shares be so strong when June quarter GDP collapsed – by an average of -10% in developed countries and an estimated -7% in Australia – and coronavirus continues to reap havoc?

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.