In Covid’s long shadow

Three years ago, the reality of Covid shook global markets from its sanguine state. The new coronavirus that had emerged from Wuhan, China, was spreading globally, and investors began to panic, especially when Italy became the first country to institute a nationwide lockdown on the ninth of March, following earlier regional lockdowns. Over the course of the next three weeks, liquid assets across the world were dumped in a frenzied scramble for cash. Only when central banks forcefully intervened with promises of near-unlimited liquidity injections did markets stabilise. Soon, amazingly, a blistering rally was underway. Looking at a chart of global equity indices, Covid appears as a blip, although a very deep one.