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Reading the COVID-19 Market

There is no telling whether equity markets are correct in defying the popular narrative about a coming Great Depression-scale downturn. Investors may be clinging to irrational hopes, or they may be betting that reports of the death of globalization have been greatly exaggerated.

LONDON – Though I have spent nearly 40 years studying financial markets, I find them as bewildering, complex, and fascinating as ever. At the time of this writing, the most widely watched equity index, the S&P 500, is trading at around 2,878, where it closed on April 27 (a Monday). That was its highest close in six weeks, putting it less than 15% below its all-time high, reached just before the COVID-19 pandemic, and some 30% above its low in March.