Why Is the Stock Market So Strong When the Economy Is Weak? the U.S. economy shrank 31.7% in the April-June quarter ......... the apparent disconnect between the stock market and the economy ........ we may have situations “where the stock prices may predict something that is going to be different from what we see right now.” ......... “What the Fed is doing right now is unprecedented,” he continued. The Fed has continued on the trajectory of low interest rates since mid-2019, but also pressed on with its “quantitative easing” approach to inject liquidity into the financial system, which it had used in the aftermath of the 2008-2009 financial crisis. “In recent months, it is not only doing the traditional quantitative easing of buying treasuries and mortgage-backed securities, but also continuing to buy other assets like corporate bonds, which is something that the Fed has not done before.” ............. The prices of assets are “mechanically pushed up” by the Fed’s act of purchasing them .......... the stock markets are factoring in expectations that the U.S. economy will rebound 20% or more in the current third quarter, with the lifting of lockdowns and resumption of modest economic activity in many parts of the country. ............ the stocks that are doing very well – Google, Facebook, Amazon, Microsoft, Netflix – haven’t been hurt that much by the current economic conditions. Some of them maybe have benefited from them. They are very dominant in the stock market, but they are not necessarily representing the economy as a whole ............... small businesses have no access to the stock market…. You see they are closing down. They are firing people, and so on, but you don’t see any reflection of those particular businesses in the stock market. ............. part of what’s going on is the fact that stock prices are forward-looking, so maybe they are seeing something optimistic. But it could be that they are missing some negative signals, and maybe those negative signals will come back to hit the market soon ............ Amid all those liquidity infusions are worries that the federal debt will balloon to unmanageable proportions .............. The stock market is a prediction machine in the short term, a weighing machine in the long term. ........ I’m expecting the black swan style blow up to make the current pandemic and civil unrest look like a vacation.
Ventilator Maker: We Can Ramp Up Production Five-Fold
Experts warn U.S. covid-19 deaths could more than double by year’s end The global death toll from the coronavirus pandemic could triple by year’s end, with an additional 1.9 million deaths, while a fall wave of infections could drive fatalities in the United States to 410,000 ......... cooler, drier weather and increased time spent indoors could boost viral transmission in the Northern Hemisphere surge this fall and winter — something typically seen with other respiratory viruses. .......... The best-case scenario is 288,381 deaths and worst-case is 620,029 ....... The scenarios pivot on human behavior and public policy. The best-case scenario would result from near-universal mask-wearing and the maintenance of social distancing and government mandates limiting the size of indoor gatherings. The worst-case scenario assumes that people and their communities stop taking precautions.
