The continuing strength of the stock market, even as the coronavirus pandemic batters the U.S. economy, has baffled many investors. The Dow Jones Industrial Index fell some 35% in 20 trading days the first three weeks of March as COVID-19 began spreading rapidly globally, but it has since gained nearly 60% to levels above 28,650. At the same time, the Commerce Department reported the U.S. economy shrank 31.7% in the April-June quarter. Part of our job at Equitas is to research many areas of the market and the economy, analyze the current environment, and to search for the investment opportunities. While there are numerous views and theories, in this KnowRisk Report we explore and expand on why the stock market is so strong, while the economy is so weak. We start with Wharton finance professor Itay Goldstein who has boiled it down into two reasons: the long-term prospective of the
Already Weak, Air Travel Demand Is Fading. And Pent-Up Business Travel Demand Will Be Soft Whenever It Arrives
The global decline in air travel will be worse than previously forecast and a new report on corporations’ plans travel through 2021 shows that the recovery of business travel demand will continue be sluggish even after the anticipated approval of one or more Covid-19 vaccines in, hopefully, the first half of 2021.
The International Air Transport Association, the airline industry’s global trade group, said Tuesday that global passenger traffic this year will be down a whopping two-thirds – or 66% – from 2019. Previously IATA had forecast a traffic decline of 63%.
While the revised view is only 3 percentage points worse than IATA’s previous forecast, the
- US stocks climbed on Thursday as tech giants attempted to reclaim record highs.
- Rebounding tech names led indexes higher on Wednesday. The sector has fueled outsize volatility in recent sessions as investors reconcile lofty stock valuations and strong momentum.
- Investors also mulled weekly jobless-claims data that signaled lasting pain in the US labor market. Claims totaled 884,000 for the week that ended on Saturday, missing the economist estimate of 850,000.
- Oil fell after the American Petroleum Institute reported that US stockpiles increased by nearly 3 million barrels. West Texas Intermediate crude sank as much as 2.3%, to $37.17 per barrel.
- Watch major indexes update live here.
US equities gained on Thursday as tech stocks resumed their recovery rally and boosted major indexes.
The popular sector has taken center stage this week, following its collapse before Labor Day weekend. Tech names pushed indexes higher on Wednesday as investors scooped
Disclosure: Author holds 100% cash reserves
The Wall Street Journal’s “Intelligent Investor” Jason Zweig discusses the age-old problem with successful growth companies in “Apple Still Wears the Market Crown.”
- “It Can Easily Slip – Many investors seem to believe that today’s giant technology companies will dominate the stock market for decades to come. Years, maybe. Decades, probably not.”
History is the key to understanding where Apple is now
Apple had a mixed beginning for many years, from the time Steve Jobs,
By Chuck Mikolajczak
NEW YORK (Reuters) – A gauge of global stocks fell for a second straight day on Friday and marked its biggest weekly percentage drop in nearly three months, while the dollar ran out of steam, ending a three-day run higher, after a U.S. payrolls report painted a weaker economic picture.
U.S. job growth slowed in August as financial aid from the government was depleted, with nonfarm payrolls increasing by 1.371 million jobs versus 1.734 million in the prior month. Expectations were for the addition of 1.4 million jobs. The unemployment rate fell to 8.4% from 10.2%.
“It points in the right direction, but still leaves some question marks as 8.4% of unemployment is still a high rate,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “They certainly point to recovery, but yet a weak recovery.”
For a graphic on Jobs fell off