According to Barry Bannister, a Wall Street analyst, there’s no chance that shares would return fast to their pre-pandemic values
American Stock Exchange indexes seem to have returned to values of 2017.
Dow Jones Industrial Average fights with $20,000 points level. During Monday trading, it even appeared on 19,907 for a while, where it last appeared in 2017. S&P 500 index experiences similar decline. “Based on our models, stock exchanges will need a lot of time to return to previous values,” said Bannister. We should definitely not count on V-shaped rebound.
How long is it going to take? About five years, according to Bannister. He based his assumptions on American shares progress before coronavirus epidemic appeared. Many cyclical stocks grew stronger than the market itself. These cyclical stocks will now block return of market to its highs.
As a result of the onset of the economic recession, situation will worsen. Bannister compares the current situation to selloff in 1980, 1987 and 1990, when two of the years turned into economic crisis.