The Covid-19 pandemic, which has yet caused an unprecedented freeze in economies, has barely made itself felt in the markets. In the United States, the S&P 500, the main stock market index, is currently reaching its all-time high, having increased by 44% since January 2020. The same is true in France, where the CAC 40 is also at its highest in its history, rising by 18% over the same period.
Soaring prices come from “unprecedented fiscal and monetary support,” Morgan Stanley bank recalls in report
Real estate prices are also soaring everywhere, especially in all the big cities. In the United States, housing currently sells for an average of 404,000 dollars (359,000 euros), 22% more than before the crisis. In France, real estate rose 5.9% over one year (between the third quarter of 2020 and the second quarter of 2021), despite successive confinements. Raw materials, oil and food products are also on the rise.
This all-out outbreak comes from a “Unprecedented fiscal and monetary support”, recalls Morgan Stanley. Governments in Europe and the United States have all practiced the same “Whatever the cost”, with partial unemployment, exceptional social assistance and loans guaranteed by the State. As for the central banks, the intervention was also exceptional: all interest rates went to zero, or even to negative levels, while asset purchases reached record levels. For example, the European Central Bank (ECB) has spent 2,000 billion euros since the start of the pandemic in March 2020, allowing states to finance themselves painlessly.