Global stockmarkets rallied over the week, reassured by central bank pledges to do whatever it takes to help economies and by massive fiscal stimulus measures from governments. While Europe, particularly Italy, Spain and France, continued to see large numbers of daily fatalities, the epicentre of the virus crept west, with the US recording more than 100,000 confirmed cases.
Bargain hunters were also in evidence as the S&P 500’s earnings yield minus the 10-year Treasury yield rose to its highest level since the eurozone debt crisis of 2012. However, a growing number of companies are cutting or cancelling their dividends and/or share buybacks to help protect their balance sheets against coronavirus disruption. In the UK, dividends have dropped by the largest amount since the 2008 financial crisis, while payouts from US companies are set to drop for the first time since 2009.