How the 2020 global share slump and recovery ranks in history What is city talk?
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Stocks saw a record crash followed by a record rebound in 2020, creating some disparity between markets, as Duncan Lamont explains.
The global stock market crashed at a record speed in early 2020 (Figure 1).
On its way to a total decline of 34%, it clocked up a 30% loss in just 40 trading days.
This is faster than any global stock market crash in at least the last 48 years that we have daily data on global stock market returns for.
A record breaking rebound
Astonishingly, in the eight months since, it has rebounded by 62%. The losses from this record-breaking crash were fully recovered by 23 August, only five months after the market bottomed and while the global economy was still deep in a quagmire. Since then it has sailed even higher, most recently on the back of positive vaccine news. The global stock market is now almost 8% above its pre-crash peak.
Zero is critically important.
But as
Zero, the number, becomes more associated with benchmark interest rates and returns on bonds, its importance cannot be understated. At the beginning of what could be a prolonged period of policy fueled financial repression, we will all have to focus on
Zero, its impact on investment decision making, and its impact on asset allocations. We have only begun to see
Zeros everywhere.
At its most basic level,
Zero is the absence of anything; that absence can be a hard concept to explain. Most simply, the absence of things can be taught to children, much in the same way I taught it to my brother when I took all his toys away.