Thursday, May 29, 2025

Latest

International Monetary Fund Issues Warning of Possible Repricing of Risk Assets

If the coronavirus infection rates do not subside soon, resulting in a reinstatement of economic lockdowns or even increased trade tensions, stock and risky asset markets could falter once again, warns the International Monetary Fund (IMF).

When the severity of the coronavirus pandemic first became evident, it caused many countries to impose some forms of economic lockdowns and social distancing measures. As a result, equity markets took a beating, with the S&P falling by a total of 34% over a duration of 23 trading days. As a result, financial aid from the Federal Reserve pulled the market back to stability relatively quickly. However, the IMF warns in its report that a certain disconnect has developed between actual economic prospects and financial markets.

In light of the extensive financial support by central banks, equity markets have been expecting a V-shaped economy; however, that is not the case. a divergence has emerged between economic prospects and the price of risk in the financial market. Although equity markets have been faring well as a result of unwavering central bank support, consumer confidence on the other hand has been significantly dwindling. Therefore, such a situation raises the question of whether or not equity markets would be able to survive once central bank support ceases.

The IMF further warns that a significant gap exists between market valuations and market prices. In the event of an economic trigger such as a resurgence of the coronavirus, the reinstatement of containment measures, or a prolonged and more severe recession, the repricing of risk assets could very well ensue.

Information for this briefing was found via the International Monetary Fund and Kitco. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

How To Profit From $3300 Gold? An Inside Look At A Massive 300,000 Oz Project | Martino De Ciccio

We’re At The Start of a Great Silver Boom | Ross McElroy & Andy Bowering – Apollo Silver Corp

Equinox Gold Q1 Earnings: When Everything Goes Wrong

Recommended

Sterling Metals Hits 0.21% Copper Over 482.8 Metres In First Drilling At Soo Copper project

First Majestic Makes Second Major Discovery At Santa Elena In Just A Year

Related News

Internet Of Things Inc Receives Health Canada Approval For ThermalPass Fever Detection System

The Internet of Things Inc (TSXV: ITT) this morning announced that it has received Health...

Tuesday, May 26, 2020, 10:14:27 AM

Oil Prices Plunge to 5-Month Low as New Lockdown Restrictions Crush Demand

As coronavirus cases rise rapidly around the globe, fears of the second, much more severe...

Thursday, October 29, 2020, 01:09:00 PM

Vancouver Housing Sales Surge by 29% in October Despite Economic Slowdown

Despite the resurgence of a COVID-19 wave, it appears that Canada’s housing market still remains...

Tuesday, November 3, 2020, 04:29:00 PM

Trump’s Economic Advisor Makes Grim Prediction Regarding Q2 GDP and Unemployment Rate

Kevin Hassett, who is the White House economic advisor, is anticipating very grim GDP and...

Tuesday, April 28, 2020, 03:00:00 PM

Gold Rallies upto 7% as Central Banks Around the Globe Continue to Print their Way Out of the Coronapocalypse

This morning Gold has rallied approaching 7 year highs. We can see Gold is pushing...

Tuesday, March 24, 2020, 09:41:47 AM