Admittedly, current economic conditions are poor. Economic output has cratered,But this does not necessarily mean equity prices should be substantially lower than they are now. The US equity market is not about whether economic conditions are good or bad. Rather, what matters is whether conditions are improving or getting worse.
Consider the period following the 2009 recession. It took many years for the level of economic activity to return to potential, as the chart below demonstrates. Even as potential growth repeatedly got revised down, the level of growth hit potential sometime in 2017. Still, this period was an especially good one for stock prices even if for many, it "didn't feel like" a recovery.
Notice that the timing of this improvement precedes the formal lifting of shelter-in-place orders for nearly all states. Thus, it stands to reason that there is room for at least some improvement once formal lockdowns end. For example, in 1982, the economy saw a deep recession after a brief recovery because the Federal Reserve tightened interest rates to take on inflation. In the case of the coronavirus pandemic, the policy choice would be to shut parts of the economy down if the virus spread gets worse.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:
Canada Canada Latest News, Canada Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
US companies eliminated a record 20.2 million jobs in April, ADP report says - Business Insider'Job losses for the month of April alone was more than double the total jobs lost during the Great Recession,' said Ahu Yildirmaz of ADP. much more in june-july!
Source: BusinessInsider - 🏆 729. / 51 Read more »
Cruise ship workers stuck on ships finally allowed to disembark in US - Business InsiderThousands of stranded cruise workers are finally being allowed to disembark ships in the US after cruise companies agree to strict deals with CDC
Source: BusinessInsider - 🏆 729. / 51 Read more »
Trump taps top GOP fundraiser to lead the embattled US Postal Service - Business InsiderThe new postmaster general's coziness with Trump will likely facilitate his efforts to dramatically raise delivery prices for Amazon. Trump taps former CEO of logistics company to run major logistics branch of government. Amazon must pay more. It is the price for their monopoly position. Translation: realDonaldTrump wants the Postal Service to stop losing money. Good for him.
Source: BusinessInsider - 🏆 729. / 51 Read more »
US stocks climb as economic reopening hope offsets dismal jobs report | Markets InsiderUS stocks rose Wednesday amid continued efforts by the US government to reopen the economy. Investors looked past a dismal report from ADP showi...
Source: BusinessInsider - 🏆 729. / 51 Read more »
Meat shortage pushes prices higher for US grocery shoppers - Business InsiderThe American meat shortage is pushing prices to unprecedented heights — here's how it could affect your grocery bill Why? There is no meat shortage, these Chinese Communist owned Meat and Poultry Plants are shutdown to cause situations. Many of us don't need meat to survive.
Source: BusinessInsider - 🏆 729. / 51 Read more »
Largest mobile soup kitchen in US overwhelmed with 50% spike in demand - Business InsiderFood programs have become vital as more than half a million New Yorkers have lost their jobs during the health crisis.
Source: BusinessInsider - 🏆 729. / 51 Read more »