Yahoo Finance Is There A Disconnect Between The Economy & The Equity Markets?
US unemployment claims are increasing by millions every week and some speculate we will hit 25% unemployment by this summer (depression levels). It will be years before employment fully recovers, which will hurt long-term demand.
The tech-driven Nasdaq index surged over 35% from its March lows and is now up for the year. How can the equity markets be recovering so quickly from a recession that is just beginning? What is causing the disconnect between the economy and the stock market?
The economic downturn has had a disproportionate impact on industries. Some industries have been devastated by this pandemic such as retail, airlines, and energy. Other sectors have been thriving in this environment like technology and healthcare.
Technology stocks have been the primary catalyst for the rapid market recovery. Many tech companies are actually benefiting from the stay-at-home order such as Amazon AMZN, Microsoft MSFT, and Adobe ADBE, whose services have been essential during this pandemic.
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