On March 11, 2020, the World Health Organization defined the Covid-19 epidemic as a global epidemic, with about 200,000 infected worldwide, including about 81,000 in China. Since the crisis unfolded, these numbers have grown to hundreds of thousands and even millions in countries around the world, and fears of a global and local economic recession have led to a financial crisis. Expectations of the crisis peaked in mid-March, with sharp declines in financial markets, which reached alarming rates in value. At the macroeconomic level, many countries have suffered an impact on GDP and employment rates, as a result of imposing restrictions on economic activity and as a result of allocating economic resources to contain the epidemic. Rising debt levels in the country and the debt-to-GDP ratio have raised fears of a global recession, with the US economy expected to contract by 14% in the second quarter of 2020, 8% in the third quarter and beyond 4% growth in the fourth quarter only. The forecasts for the European market are similar; After shrinking by about 22% in the second quarter of 2020, the European market is expected to return to growth of only about 3.5% by the end of the year.
In order to boost the economy, the world’s central banks have responded by injecting generous aid packages, such as the US Fed, which announced in March 2020 an injecting $ 1.3 trillion, and a reduction in interest rates. The Bank of England (BOJ) and the European Central Bank (ECB) have announced plans to buy hundreds of millions of euros worth of bonds each month. In order to inject cash into the economies, these measures, designed primarily to alleviate the debt side of the money market, in parallel with the price declines in the asset markets, have created interesting opportunities for investors.