Is the market in recovery mode?

Today is the 31st day of the Moving Control Order in Malaysia. The COVIT-19 statistic for Malaysia seem to be positive and well under control. Refer to below chart as per updated on 17 April 2020 by The Star. The infected cases is down to two digit for the past 2 days, yesterday is at 69 new cases.It signified that the condition is getting better and better. Will there be no more Phase 3 MCO? 

Will this translate to better economy coming? Look at the world wide stock market below:

Everyone wants to know if the market is bottom at that time (23 March 2020), but there is no clear answer to this question even today. So today we are asking, if the market is rebounding strong now? What we can see that the expanding coronavirus pandemic pushed the market into bear territory earlier in March 2020.

In the meantime, almost all countries come out the stimulus plan to support the economy haven't been enough to sustain the lock down situation. Nothing can be move, everybody stay at home, money is not flowing to anywhere except digitally.

From the above table shown, since 23 March 2020, it keep going up till today. The rebound by the worldwide stock market off its March 23 coronavirus low is impressive, but is it going to be real and sustainable?

In our local KLCI, since the market last bottomed on the 23rd March when KLCI falls to a level of around 1260, it has rebounded some 140 points to end this week at 1407.

The market continued to breach one resistance line after another in the past few weeks. As a point of reference, the current KLCI levels right now is similar to what we've last seen in Sept 2011. Wow, that is 9 years ago, we are back to level of 9 years ago.

However, today situation is different from Sept 2011. What we are facing now is the worldwide health threat. The world is stand down, either Lock Down or restricted movement. No one travelling, flights are grounded, retail stores are closed, all events are stopped and a lot more.

Even if the lock down slowly open up, like Wuhan open up after 76 days, we are in 31 days since 18 March, the economy will not straight away back to the normal as we had last year. When will aggregate demand recover to pre-virus levels. The situation might be a lot dire now with unemployment almost at an all time high and many businesses going to close down.

As such, look at the current rebound rate, will it be second round of crashed? I think no one able to answer and we have to make our own judgement and prepare for it.