Wall Street experienced a sustained spike in the prices of stocks earlier in the week after US President Donald Trump claimed the infection rate of the coronavirus had stabilised. But despite the rally suggesting the “free fall” is over, financial strategist Jeffrey Kleintop insisted the full recovery of the market will depend on how businesses react to the aftermath of the pandemic. Speaking to CNBC International, Mr Kleintop said: “It’s certain that we don’t know what the recovery looks like, which is fairly obvious.
“What the stock market has done here is it’s rallied on the idea that, maybe, the worst of the economic free fall is over and we’re now talking about reopening the economy.
“The rally that we’ve seen so far on that basis makes some sense but that’s the easy part.”
The financial strategist continued: “The hard part lies ahead. What kind of recovery are we going to have?
“Is this stimulus that’s been put in place enough to revive the economy?
“Will people will safe leaving their homes again without nation-wide testing?
“And what this look like if we look at May, June, July – could we see a second wave of the infection as people interact a little more?
“That’s still unknown and we could have tougher times ahead.”
President Trump in March agreed to a $2 trillion stimulus to help diffuse the pressure the COVID-19 outbreak has already been having on the US, and global, economies.
The boost came after President Trump outlined the early stages of his ‘Opening Up America Again’ economic plan.
Under phase one of the plan, current lockdown measures such as avoiding non-essential travel would remain in place but large venues would be able to operate under strict physical distancing protocols”.
Phase two would allow non-essential travel to resume but only once no evidence of a resurgence of the outbreak is present.
Under phase three, states which are still seeing a downward trend of symptoms and cases can allow “public interactions” with physical distancing and the unrestricted staffing of worksites.