Protests and riots dominate headlines and appear to have brought much of America to a standstill, but Wall Street's big recovery continues build.

What was happening in America was very sad, said Pie Funds chief executive Mike Taylor, about the social unrest of the past week.

"But from a market's perspective it is not something that they see as effecting economic activity or having a long-term effect on the economy," he says. "So markets do just tend to look through these kind of events."

Broadly, markets in the US, and locally, were being buoyed by optimism about progress on coming out of lockdown, even though there was still a significant economic downturn to play out.

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"You can't underestimate how people feel from a mental perspective just being able to go to a restaurant, to go and see their friends," Taylor said.

The sense of incremental progress was creating an optimistic outlook.

US markets and New Zealand's NZX-50 fell about 30 per cent as the world went in to lockdown.

Since then they have rebounded dramatically with the US S&P500 up and the NZX now up 37 and 31 per cent respectively since their low points in March.

"I think you probably could say both those markets are now in bull markets, Taylor said.

In the US the markets had a big tech focus with stocks like Amazon and Netflix doing particularly well and lifting the Nasdaq index by 40 per cent from it's March low, and close to its all-time high.

In New Zealand the strong performance of market darlings a2 Milk and F&P healthcare had contributed to the strong rebound.

"Plus both countries have had big stimulus packages."

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In New Zealand that was about $60 billion of fiscal stimulus from the Government and $60 billion of monetary policy stimulus from the Reserve Bank.

The US has had about US$2.7 trillion of fiscal stimulus and monetary stimulus of $5.6 trillion.

Federal Reserve Chair Jerome Powell speaks during a news conference to discuss an announcement from the Federal Open Market Committee, in Washington. AP File Photo.
Federal Reserve Chair Jerome Powell speaks during a news conference to discuss an announcement from the Federal Open Market Committee, in Washington. AP File Photo.

The biggest risk to markets was a second wave of Covid-19 infections that forced governments to impose new lockdowns, Taylor said.

"That would be catastrophic for economies and I think there would be many who would urge that we don't have a second lockdown, even if we do have a surge in cases," he said.

That would be a death knell for many businesses that were just hanging on.

Although there was a an economic downturn still to play through with unemployment on the rise, it was unfolding at a rapid pace, Taylor said.

Unemployment had risen at a rate that would normally have taken years, so there was some hope that the recovery would be quite rapid as well, he said.

In the US there were 40 million jobless claims as the lockdown took hold. But ongoing claims was now 21 million.

"So that implies that for people who did lose their jobs, those jobs have come back or they've found other jobs. It's still a huge number they have to contend with, but it is positive news."

There were still geo-political risks.

Even though markets had been immune US domestic issues, the threat of renewed US China trade tension remained real, Taylor said.

"We shouldn't underestimate that," he said.