Western Economies: Second stock market crash – 3 reasons why it could be coming, and what I’d do right now - by Royston Wild

The FTSE 100 has steadied again but investors remain extremely jumpy. Dip-buying activity remains thin on the ground as market makers consider the possibility of a second stock market crash.

It’s impossible to say with any degree of certainty whether another crash is around the corner. But there’s certainly plenty of potential problems that could cause a fresh financial market meltdown. Here are three reasons why a second share market collapse could happen sooner rather than later.

The easing of lockdown restrictions across the globe have allowed stock indexes to creep steadily higher from their March troughs, leading to hopes of swift economic improvement.

Have politicians been too quick in lifting restrictions, though? A subsequent secondary spike in coronavirus cases has led many to believe that the answer is ‘yes.’ Parts of China have had to be locked down again in recent days. Infections in some parts of the US continue to balloon. And today the World Health Organisation said that it has seen a resurgence of cases in more than 20 European countries.

News flow has led to speculation that efforts to steadily ease lockdown restrictions could be slowed. Some are suggesting that strict quarantine measures could be re-introduced in a move that would deal a bodyblow to the economic recovery and likely cause another market crash.

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Second stock market crash – 3 reasons why it could be coming, and what I’d do right now