Markets rise, could “crack pretty hard” within 18 months

Markets rose on Monday.

The S&P 500 jumped 1.6 percent, the STOXX Europe 600 rose 0.7 percent and the Shanghai Composite surged 2.6 percent.

“Investors have not lost faith that further stimulus measures will follow and that an effective COVID-19 vaccine will soon be placed on the market,” said Milan Cutkovic, market analyst at Axi.

Still, the resurgence of COVID-19 in Europe is leading to new restrictions that could hamper an economic recovery.

“Further lockdowns would jeopardise the already fragile economic recovery and have lasting effects on consumer confidence,” said Cutkovic.

DoubleLine Capital founder Jeffrey Gundlach thinks that the US may not fare much better.

“I don’t think people fully understand how many business closures there’s going to be in the next few months,” he said.

He added that within 18 months, stocks are “going to crack pretty hard”.