On analysis of the movements of the S&P 500 futures, in different time frames, I find that the global equity markets seem to revolve around the currently prevailing uncertainty. The overvalued indices have already factored in a sustainable economic recovery.
The injections of trillions of dollars by the central banks around the world via quantitative easing to combat the coronavirus crisis impact seem to be creating an equity bubble, which could explode any time soon. The S&P 500 Futures tested a new high only due to growing hopes for fresh economic stimulus before the presidential elections.
U.S. Treasury Secretary Steven Mnuchin's recent move could encourage others to follow this strategy at this crucial juncture, while the whole world has been passing through the fresh lockdown probabilities once again.
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