The record highs attained by Wall Street last week might come as welcome news for US President Donald Trump. But the booming stock markets will offer little solace to the many millions of people who have lost their jobs and livelihoods as the coronavirus pandemic pushes economies around the globe ever deeper into recession.
The US economy, the world's biggest, contracted by 9.5% in the second quarter, Britain's economic output shrank by 20.4% and Germany's by 10.1%. At a time when working from home, online streaming and social networks are an increasingly integral part of everyday life, it is technology companies that are currently tending to shine, while other sectors of the economy pick up the pieces from the economic disaster wrought by the pandemic.
"Whether technology stocks have further to run is the multi-billion-dollar question," said Richard Hunter at Interactive Investor. In March, the US Congress approved a mammoth US$2.2 trillion recovery package, topped up by nearly US$500 billion in April, and another one is under discussion. This is encouraging investors to bet on ever riskier assets in their hunt for returns, with stocks the prime candidates.
Some of the enthusiasm had petered out by the end of the week and Wall Street's performance on Friday was tepid.