As the number of Canadians affected by the Coronavirus has jumped since February, many measures have been implemented to protect the population. As Canadians are asked to stay home and respect social distancing, consumption habits have consequently changed. Consumers have stopped or delayed purchases, forcing businesses to adapt to a lack of cash flow.
“I do want to acknowledge the virus is undoubtedly going to have an economic impact. We know the impact is real” said Finance Minister Bill Morneau in remarks to the Economic Club of Canada, as reported by BNN Bloomberg at the beginning of February.
The spread of the coronavirus and its consequences on the Canadian economy have been accelerating since then, which has pushed the Canadian stock market down. After a small gain in January (+1.49%), the S&P/TSX index lost more than 6% in February and almost 18% in March, when it reached its lowest level at around 11,172 points on March 23rd.
The fall in the stock market prices has been felt across the globe, as fears about the consequences of the coronavirus on the global economy have intensified. However, prices of major indices bounced back, offering many trading opportunities for investors and traders. Since the dip, prices of the S&P/TSX index have gained almost 30%
The number of people interested in day trading to take advantage of these wild price movements has increased. As this type of trading requires opening and closing trading positions on the same day, it’s better suited for short-term traders.
It can be quite a risky activity, as it’s a trading solution for those wanting to use this unusually high volatility to make quick profits. But it can also be a rather profitable way to make money on the markets if you’re careful and follow your trading plan with money management rules.
still so much uncertainty surrounding COVID-19
and how it will truly impact Canadian and global businesses and
trade, this high volatility is far from over. Many countries around
the world are currently discussing the end of the lockdown period and
how they might reopen businesses. However, there is a high risk of a
second wave of the coronavirus if economies reopen too quickly.
“We cannot be in a rush to get things going again because if we move too quickly to loosen all these controls everything we are doing now might have been nothing,” Prime Minister Trudeau said on April 15th. “We’ll find ourselves in another peak just as bad as this one or worse.”
The Prime Minister said that there will be “many more weeks” before any relaxation is possible in Canada. “Once the experts are telling us we can reopen the economy a little bit, we will take very careful steps and do that,” he added. So, in the meantime, stay safe at home and take advantage of the many trading opportunities that are available at this time.