COVID-19 Continues to Spread & Vroom Goes Public | Stock Market and the Economy Correlation Confusion - Daily Financial News & Insights for June 19, 2020

COVID-19 Spreads & Vroom Goes Public – Daily Financial News Summary for Tuesday, June 9, 2020 Major indexes were mixed on Tuesday, as the multi-day rally was paused. The Dow Jones fell by 1.09%, and the S&P 500 by 0.78%. The NASDAQ rose by 0.29%. Major technology companies such as Amazon, Facebook, Apple, and Netflix helped contribute to the NASDAQ’s increase today. Yesterday, the National Bureau of Economic Research (NERB) announced that the U.S. economy has been in a recession since February. This announcement so far has had a relatively small negative impact on the stock market. Said Brent Schutte of Northwestern Mutual: “We’ve been telling people to ignore the economic data. The market is a forward-looking mechanism – it’s looking forward to a better future, it’s reflecting the fact that we’re opening large swaths of the U.S. economy without significant spikes in cases. We do suspect that in the future, while the returns certainly aren’t going to be what they are today or what they have been over the past few months, there still is value left in different parts of the market for investors.” READ MORE: https://callputstrike.com/2020/06/09/covid-19-spreads-vroom-goes-public-daily-financial-news-summary-for-tuesday-june-9-2020/ What is the Correlation Between the Stock Market and the Economy? By now, everyone has heard about the global pandemic known as COVID-19 and the havoc it has wrecked upon the world. People have lost their jobs, their businesses, and many have lost their lives. The U.S. economy is currently in a recession, but major stock market indexes are performing record highs. Since the economy is so bleak right now, some people are wondering how the stock market is rallying so high. What Happened? Just before the pandemic came to the United States, the economy and the stock market were both doing well. The economy’s GDP had grown by 2.3% in 2019. Domestic economic activity was just peaking in February, which is when the major indexes, the Dow Jones, the S&P 500 and the NASDAQ, reached record highs as well. When Covid19 started running rampant throughout the country, both the economy and the stock market suffered. Millions of jobs were lost, and many businesses were forced to shut down. The low point for the stock market was March 23, when the Dow Jones fell 37.12% from its high on February 12. This was also the day when the S&P 500 had fallen 34.06% from its high on February 19. The NASDAQ fell 30.26% from its highest point to its lowest point. Currently, the economy is in a recession, but stocks are soaring high. On June 8, the three major indexes finished above, or close to, their record highs. The NASDAQ closed at 9,924.74, which is a new record. The Dow Jones closed at 27,572.44, which is only 6.7% off its high point in mid-February. The S&P 500 ended the day at 3,232.39, a mere 4.5% off its highest point. Why? READ MORE: https://callputstrike.com/2020/06/09/what-is-the-correlation-between-the-stock-market-and-the-economy/