The Stock Market isn’t always reflective of the Economy
The Stock Market Isn’t Always Reflective of the Economy
We have had many conversations with clients about this exact topic. As the economic data worsens from COVID related shutdowns, the stock markets have rallied. How is this possible?
Remember that the stock market is a leading indicator, forecasting future earnings and possible economic ups and downs. To show how confusing this may be, in April we saw S&P 500 Earnings per Share (EPS) for 2020 drop by a record -20.5% and yet the S&P 500 had its best month in 33 years, up +12.7%. Today, we broke a record for the number of weekly unemployment claims, the unemployment level is now at 14.7% and yet the stock market has been up all week.
A few visuals and charts we found interesting. Stay safe, stay healthy and have a great weekend, and if you have questions about what to do with your finances, we're here to help.