John Betteridge: Why we should prepare for market volatility

clock • 4 min read

There have been some surreal Covid-19 market reactions, including negative oil prices and gravity defying equity valuations, writes John Betteridge. As analysts adjust their earnings growth forecasts in line with pessimistic economic predictions, he says we should prepare for more market volatility...

This Covid-19 crisis has brought the surreal to our everyday lives in many ways. Perhaps the most surreal financial market manifestation has been the collapse in oil prices. At the start of this year, the US crude oil benchmark West Texas Intermediate traded above $60. Before the expiry of the April futures contract, that price had fallen to minus $37 as producers literally paid buyers to take the oil. As we learn of the shocking rise in unemployment in the US, we also note the surreal gap emerging between the economists' expectations of the economic loss resulting from lockdown and equi...

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