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LGT Beacon: The risks have titled to the upside

May 28, 2020

Authorities around the world have started to reopen their economies and borders. Risk markets, after consolidating the strongest rebound in recorded history for about a month, have begun to perk up again recently. While uncertainties about the outlook remain, investors should also not ignore the chances that a new major bull market may be in the making.

Economies reopen as pandemic begins to fade  

The COVID-19 pandemic continues to subside globally and many economies are beginning to reopen. In the meantime, the social and economic costs of the crisis have become visible, which motivates governments to try to avoid further hard lockdowns. Such measures are economically unsustainable and can exacerbate existing social and political risks, from European tensions regarding pandemic aid to the intensification of the strategic rivalry between the USA and China. In addition, knowledge about pandemic management increases over time. Future measures could therefore be less invasive even in the event of renewed waves of infections. 

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Note: The next edition of the LGT Beacon is scheduled for June 2020.