Several months before every recession in modern U.S. history, the Standard & Poor's 500 index began a bull market.
Yet The Economist, an esteemed financial magazine, in a May 9 cover story said the stock market is disconnected from the economic reality.
But could the financial press sometimes miss the big picture? After all, bull markets always occur in plain sight but go unseen. They are never expected and always sneak up on investors.
Will The Economist's headline one day be ridiculed like the August 1979 cover of Business Week, which infamously proclaimed "The Death Of Equities?"
Stocks, as measured by the Standard & Poor's 500, gained 3.15% from a week ago, and are up 27.65% from March 23rd's bear market low. That's a big spike upward.
The Coronavirus bear market low of the Standard & Poor's 500 index, to date, was 2237.39 on March 23, 2020. Closing Friday at 2,955.45, the S&P 500 is priced for the partial shutdown of the economy to continue through the end of 2020 and a sharp recovery in 2021. Expect spikes and plunges in stock prices in the days ahead.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial situation, or particular needs. Product suitability must be independently determined for each individual investor.
This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation.
Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.