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Volatility will continue with no vaccine
Economies the world over won’t return to stability while the threat of second and third waves of COVID-19 could still occur, super fund members have been warned.
Volatility will continue with no vaccine
Economies the world over won’t return to stability while the threat of second and third waves of COVID-19 could still occur, super fund members have been warned.
In an update to members from MTAA Super CEO Leeanne Turner, she flagged that while some positive signs are occurring in markets, there’s still a long way to go before economic recovery will be able to occur.
“The impacts of COVID-19 on businesses, households and the broader economy will last beyond the immediate fallout of the pandemic,” she warned.
“And the threat of secondary breakouts, such as those that have reintroduced lockdowns in Melbourne, shows that the road back may not be smooth.”
Despite upheaval to economies still occurring worldwide, Ms Turner did flag a “strong rebound in markets” in the June quarter following a sharp sell-off in the March quarter.
This was fuelled by monetary and fiscal stimulus, with central banks and governments the world over moving to support economic activity.
According to the CEO, “This has increased confidence and has helped stabilise economic activity and financial markets.”
Domestically, “the economy remains weak”, she said.
Record-low interest rates have not helped, and government intervention via economic assistance packages can only go so far.
“Borders are closed, unemployment has trended higher and some industries and geographies are suffering due to a lack of trade activity,” Ms Turner highlighted.
“Until a COVID-19 vaccine is successfully created, the chance of heightened market volatility and possible negative returns will persist.”
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