Insights The Economy/Stock Market Disconnect

May 21, 2020
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Highlights

  • In this Investment Insights, we provide a high-level update on recent stock market gains as the COVID-19 virus negatively impacts economies around the world.
  • The U.S. stock market is up 33% from its low at this writing, supported by a massive fiscal and monetary response, a slowdown in the spread of the COVID-19 virus, and a gradually reopening economy.
  • While economic activity is likely near its trough, second quarter earnings and GDP will be among the worst in history.
  • The stock market often leads the economy and moves higher even in the face of bad economic news.
  • We expect the stock market to remain volatile, and given the enormous economic uncertainty tied to the future path of COVID-19, we remain comfortable with our slightly defensive positioning.

 

About the Authors

Patrick S. Boyle
Senior Investment Strategist
In this role, Patrick is responsible for Bessemer’s client relationships in the Southeastern U.S., including oversight of our offices in Washington, D.C., Atlanta, Delaware, and Philadelphia.