As we enter the second wave of Covid-19 and the UK faces the deepest recession in 300 years, supermarket shelves are once again being cleared. But according to online trading platform IG, this could be a good sign economically.
According to research conducted by IG, an increase in consumers buying baked beans could imply the start of market recovery following a recession.
In April 2009 during the Great Recession, value of sales in the baked beans department saw a dramatic rise of 21 per cent compared to the same month the year before. It then dropped down again coming out of the recession in June 2009, signifying that people were ready to spend more on fresh produce again.
When March 2020 saw the Covid-19 crisis come to a head, stock piling was rife notably across the US and UK, with sales soaring across the board for British supermarkets. With the economy on pause the country was heading for economic uncertainty. This was reflected again in the sales of baked beans and canned goods, with one UK canned food producer reporting a sales surge of over 70 per cent (72.5). Even more incredibly the sales in the US of baked beans and other long-life products such as powdered milk and flour, increased over the so called ‘quarantine’ period by a whopping 245 per cent.
The study comes after IG looked into what they call ‘strange economic indicators’ researching if we can in fact predict certain market fluctuations.
Financial expert, Anzél Killian, writes: “Some people believe that certain market fluctuations are caused by random or seemingly unrelated events…Today, a variety of unofficial, unusual indicators are sometimes used alongside traditional gauges.”
The study discloses that the first step to understanding market movements, is to research the market to see what causes price fluctuations. Looking at historical data to identify market trends is also a good place to start.
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