The market appears to be cracking, but no major broken lines are occurring just yet. In 2020, the world’s economy went under stress tests like never before. Some countries recovered quicker than others while some remain in a state of economic crisis. Despite the up and downs throughout the year, Godzillanewz reports that the market has dealt with stress fractures, but no clear breaks.
The cause of the fractures appears to be a combination of multiple factors. One of them being the progression of the pandemic’s disruption. It has ultimately resulted in a decrease of demand and profitability for many businesses. Then there is the ongoing uncertainty associated with political developments, rising tensions between the West and the East, and extreme volatility in stocks.
The consequences of all of these factors has caused a decrease in confidence, resulting in many investors making conservative bets. This has reduced liquidity in the markets which has added an additional layer of stress.
Nevertheless, the impacts of the stress fractures have not been strong enough to cause any major breaks. This may be because of special economic policies being implemented by governments around the world. Governments have been supporting businesses to help them survive the economic crisis, thereby reducing the disruption it causes. They have also been providing citizens with safety nets which have ensured that the financial impacts of the pandemic are not too significant.
In conclusion, it is true that the market has dealt with stress fractures, but no clear breaks. The situation still remains fragile and further economical burdens or extreme volatility may be where the current fractures turn into major breaks. Therefore, governments should continue to provide ample support for businesses in order to ensure that further damage is avoided.