As a result, activity was condensed into a shorter period of time, though so far that does not seem to have done shares any harm. Initial signs were certainly encouraging, with shares taking heart from the further easing of lock down restrictions announced by Prime Minister Johnson. While the early strong momentum did fade as the first working day of the week went on, a strong opening on Wall Street allowed the momentum to continue.
Interestingly, the more domestically focussed FTSE 250 Share Index outpaced the Footsie which, of course, has a more international make up. This returning confidence suggests investors expect a swift recovery here at home, though this is far from certain. Indeed, early estimates of the damage the lock down has caused to the domestic economy suggest that GDP could be down by as much as a fifth in the second quarter of this year. Such a blow will take some reversing.
On a global front the tensions between the United States and China are likely to weigh on investor sentiment, but it remains the effects of the pandemic that continue to dominate. On the face of it, the easing that has taken place in countries ahead of us in the coronavirus cycle does not seem to have sparked an increase in the infection rate. Even oil has perked up in price as a belief that economic recovery will pick up as the year progresses.
But it is clear that some sectors will be harder hit than others. The massive fall in retail sales is unlikely to be fully reversed, despite the news that shops can reopen in the middle of next month. And the travel industry, particularly airlines, looks to be a major casualty of current conditions. Notwithstanding that, British Airways parent company, International Consolidated Airlines, was a star performer early in the week. Even so, the world is likely to look very different once we emerge from lock down.
Then there is the issue of debt. Governments and companies have been borrowing heavily to pay for the measures that have been required to cope with problems brought about by the pandemic. Banks are already making larger provisions for failing loans and the Organisation for Economic Co-operation and Development expects the situation to worsen. We need to watch central banks closely as they expand their balance sheets massively to ease the pain of lock down. We certainly do live in interesting times.