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 It's been almost a year since the coronavirus epidemic completed the longest bull run of the S&P 500 and sent Stokes into violent rampage everywhere. This upheaval was the perfect start to a year of intense activity.

The virus continues to litter our daily lives, but the markets have long forgotten the painful account.

The Big Bang: March 12, 2020, gave Wall Street the worst day of losses in three decades. The S&P 500 (DVS), Dow (INDU), and Nasdaq Composite (COMP) fell by double digits, with the Pan-European Stocks 600 (SXXL) index having the worst day on record.

The fall was particularly shocking as markets remained aloof from coronavirus for weeks despite alarm bells ringing in various corners of the global economy. But when former President Donald Trump banned travel to most of Europe and the World Health Organization officially declared Kovid-19 an epidemic on March 11, the mood suddenly changed.

Since then it’s been a wild ride. The tragedy was in the short-lived and financial markets, driven by government stimulus, developed by a record-breaking global recession, at a record-breaking level at the end of the year - an unmistakable link between Wood Street and Main Street.

Latest: Many of the hallmarks of 2020 are still clear - and not just for lockdowns, social distance, and working from home. The cheerfulness set by equity markets over the past 12 months has kept stocks under pressure at an all-time high this year.

The growth of retailers that revived last year’s boom is uncontrollable - such as the recent release of ETFs on stocks captured by the extraordinary Gamestop Saga and generating social media buzz.

Coronavirus is still with us, but vaccine rollouts are gathering momentum and the United States is preparing for another massive stimulus package, so investors are banking for a quick and strong recovery.

Goldman Sachs forecasts 7% US GDP growth in 2021, the worst since 1984.

The big risk: Like this time last year, equity investors may underestimate the size of potential stumbling blocks. Ironically, a booming economy may not be good for stocks because it could increase funding costs for companies and rob their main selling point of equity: excellent returns.

Bond yields have outpaced expectations of rising inflation, albeit from rock-bottom levels. Yet, the change has led to fears in stock markets these days that central banks may raise interest rates to curb higher prices and curb asset purchases earlier than expected by taking more cash from the markets.

Strong recovery is good for corporate earnings, while higher rates make the debt more expensive, which can be a problem for heavily borrowed companies in a crisis. Stocks also seem relatively less attractive when bond yields rise.

Stay calm: The Federal Reserve has made it clear that it is prepared to tolerate higher inflation if industries improve and unemployment falls.

While predicting an increase in consumer prices this summer, Fed Chairman Jerome Powell said Thursday that inflation will need to be maintained at 2% and the economy will move closer to maximum employment before the central bank considers rising interest rates.

Given that the U.S. About 10 million jobs are still short due to the epidemic hitting the labor market, it will take some time before every floor is lifted.

"The backdrop will be conducive to equity in 2021," Roger Jones, head of equities at London & Capital, told me. Jones said the long-term structural frameworks of inflation - demographics, technological advances, and higher levels - are stronger than ever. In addition, equities will meet inflation unless it is more sustainable than the %% level. "

A new problem could arise in the European Central Bank

The steady rise in consumer prices in Europe seems a long way off, where economic activity has been severely curtailed by lockdown, the stimulus is limited and the outlook for GDP growth has weakened this year.

Despite all this, inflation in the sector has risen, and policymakers may eventually be forced to take action if bond yields rise.

What's happening: The European Central Bank meets on Thursday and investors will want to know how it thinks about inflation. They will also seek some reassurance from ECB President Christine Lagarde that the central bank has no plans to tighten lending conditions.

The head of research at ING Carsten Brzezinski wrote in a note on Friday that the ECB will primarily seek to reduce the recent rise in bond yields, run it through technical factors and focus on real yields.

Brzezinski expects the ECB to stress that asset purchases can be increased if necessary and move toward frontload stimulus in the coming weeks to keep funding conditions favorable.

See here: In an interview with The Economist Lagarde last month, the ECB said it had used about 800 800 billion ($ 955 billion) from its 8 1.8 trillion ($ 2.1 trillion) epidemic emergency procurement program.

He added, "We still have a lot. If we need all of this, we'll use it all."

Still, recent volatility in bond markets suggests a lot could change in a few weeks. Once the economy reopens, a sudden surge in goods and services could lead industries to price increases. Additional savings in Europe will also be of interest to the recovery if some extra cash is spent on homes.

Read more, Stock Market Crash: Not to Worry About These Points keep in Mind

ING economists, including Brzezinski, wrote in a note last week that "once sanctions are lifted and fears of a virus retreat, it is reasonable to expect prices to rise." "Eurozone headline inflation could easily accelerate to the magic 2% level this year."

The bigger picture: At least for now, Europe's economy has a long way to go from overheating. Amid fresh lockouts, GDP contracted again in the last three months of last year and with many of these measures still pending, growth in the first quarter is unlikely to improve.

The sluggish vaccine rollout and relatively modest stimulation will also weigh on Europe’s recovery. In the absence of wage increases, the ECB is unlikely to respond to short-term measures of inflation.