Here’s how 4 financial experts think protests could negatively affect markets and the US economic recovery

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Protests and lootings taking place across the US in response to the May 25 death of George Floyd in police custody could weigh on both markets and the economic recovery, according to financial experts.
Experts worry that mass gatherings at protests could lead to a second wave of COVID-19 cases and hurt consumer confidence.
Here’s what four financial experts said about how protests across the US could weigh on markets and the economic recovery.
on Business Insider.

Protests and lootings taking place across the US in response to the May 25 death of George Floyd in police custody could weigh on both markets and the economic recovery, according to financial experts.

Since Floyd’s death on May 25 in Minneapolis, Minnesota, the worst civil unrest in decades has sprung up across the country. At least 4,400 people have been arrested in the days of protest, according to the AP.

States of emergency have been declared in six states and 13 cities, and the National Guard has been called to help in 21 states and Washington, D.C., The Wall Street Journal reported, citing the Federal Emergency Management Agency. In addition, curfews have been imposed on 26 cities across 16 states.

While global markets have focused more closely on the brewing tensions between the US and China that have been renewed in recent weeks, the civil unrest could be a negative catalyst for stocks, according to industry watchers.

Read more: BANK OF AMERICA: Buy these 13 under-the-radar tech stocks poised to outperform amid flaring China tensions and lasting pandemic damage

The protests have led to mass gatherings that could induce a second wave of COVID-19 cases, which could further damage the already fragile US economy. In addition, continued unrest could threaten consumer confidence, a cornerstone of the economy, and hurt local governments and cities already reeling from the coronavirus crisis, experts said.

Here’s how four financial experts think that protests across the country could weigh on markets and threaten the US economic recovery

1. RBC Capital Markets: “The news flow appears to be deteriorating on two fronts”

“The stock market seems more focused on the trade war than the civil unrest. We share the market’s confusion about what the latter means for the path of US equities,” wrote Lori Calvasina, head of US equity strategy at RBC Capital Markets, in a Monday note.

She continued: “Nevertheless, there are three reasons why we view it as a potentially negative development for stocks.”

1. The S&P 500 has been reactive to news flow.

Markets have whipsawed on positive and negative news on the coronavirus, economy, vaccines, and more since February, according to Calvasina. “As June gets underway, the news flow appears to be deteriorating on two fronts,” she said.

2. Mass gatherings could spark concerns about a second wave of the virus.

“We’ll let the medical experts handle this debate, but will weigh in on why this matters for stocks,” said Calvasina. “It bears on how quickly the US economy can …read more

Source:: Business Insider

      

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