Despite Disastrous Jobs Report, Stocks Surged 1.6% Friday
Since the Coronavirus bear market low on March 23, 2020, stocks have soared 26.8%! That’s only 14.5% off the all-time closing high on the S&P 500 on February 19, 2020. On the same day the Labor Department announced job losses that are literally off the chart, that the nation lost a decade of jobs gains, the stock market shot up by 1.6%! Why?
Stocks are looking past the pandemic, at a sharp recovery.
Here’s a look at three forecasts for the economy, from independent institutions. The most optimistic is the consensus forecast of 60 economists in early April. They expect a v-shaped recovery back to the pre-pandemic level of economic activity by the end of 2021. The international Monetary Fund forecast is a bit less sanguine, projecting that U.S. gross domestic product will be 1.5% smaller at the end of 2021 than at its pre-pandemic peak. And finally the least optimistic of the three forecasts is from the Congressional Budget Office, which project the economy will be 3% smaller at the end of 2021 than it was in the quarter before the outbreak.
While the three forecasts differ about the precise strength of the recovery, That’s why, despite disastrous economic news, stocks have soared.
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