Is the S&P/ASX 200 Index (ASX: XJO) bear market over with more gains in international share markets? The ASX is predicted to rise today.
The ASX 200 went up over 4% yesterday and it's expected to rise by another 2% this morning. In the international share market the S&P 500 (INX) went up 7%.
Investors are definitely getting their confidence back. Since 23 March 2020 the ASX 200 has gone up 16.3%.
But is the bear market over?
Many investors have been saying that they are tracking the infection numbers and death numbers. Well, in China the coronavirus appears to be under control with growth numbers down and production almost back to normal. In Europe the worst seems to be over with the infection numbers trending lower.
It's only the US that seems to be having a really bad time now. Obviously the US is a huge part of the equation as the world's biggest economy, but the experience in Europe is giving investors hope that an inflection point is being reached.
However, the US is not nationally doing the same mitigation strategies that China and countries in Europe are doing, so I wouldn't expect a quick recovery.
And how will countries open up their economies again? If they go too soon they could start spreading the coronavirus to everyone who is still susceptible. That could cause economies to go back into lockdowns again in a painful loop.
Eventually there will be a treatment and/or a vaccine against COVID-19. But that could be a year or more away.
Foolish takeaway
I think it's far too soon to be calling this a victory. Countries like Singapore are seeing a small second wave of infections which could easily happen in the major countries. And don't forget, we have barely seen the economic effects of the shutdowns yet. I'm not jumping to invest the rest of my cash.
Despite that, I think these top ASX shares could be some of the best opportunities during this period.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
