Market recovery continues as helicopters fly overhead

An unprecedented bout of stimulus is helping prop up global equities, with investors hoping to pick up some staple travel firms in the hope of a long-term recovery. Meanwhile, gold and bitcoin are finding favour as traders consider the consequences of a world with seemingly endless supplies of stimulus.   

• European stocks rise, as stimulus packages come thick and fast
• Gold finally finds favour as a haven asset
• Traders rush to pick up hard-hit travel stocks

European indies are managing to maintain the bullish momentum following a day of historical gains yesterday. As we find ourselves in the midst of an unprecedented bout of global fiscal stimulus, there is plenty of good news helping to overshadow the inevitable economic difficulty that lies ahead. To a large extent the growth of the virus and expectation of economic weakness is a known to markets, with the size of the bailouts providing the unknown element that is gradually released to the benefit of market sentiment. However, it is unlikely that the selling is quite over yet, with the current market gains expected to falter once we move beyond this phase of persistent fiscal stimulus announcements. Helicopter money appears to be the tool of choice for many, with both Japan and the US expected to provide direct financial payments in a bid to alleviate any financial squeeze that many may be experiencing. However, this crisis is multifaceted in nature, and it is the lack of demand for businesses which will continue to drive this economic downturn. 

In a world of seemingly endless stimulus, it comes as no surprise to see traders favour the non-fiat assets such as gold and bitcoin. Initial gold weakness in the face of funding concerns are now easing, with gold seemingly unable to operate as a haven when global markets are in freefall. Interestingly, while stocks are on the rebound this week, we are finally seeing gold belatedly act as a haven as the threat of recession and continued stimulus sees traders flock to pick up gold where they can.

Chief amongst today's gainers are those stocks which are expected to suffer the most throughout this period of economic decline. Airlines, hotel groups, and banks are all finding favour in an environment where traders attempt to find value in businesses that are expected to ride out the turbulence of a global shutdown. Despite the chancellor's decision to hold back on any airline bailouts, the offer to act as a lender of last resort highlights the fact that the government is unlikely to let these multinational businesses fail. 

Ahead of the open we expect the Dow Jones to open 587 points higher, at 21,292.