Well the stock market is doing very well despite the incredible surge in COVID cases, deaths and hospitalizations. The economic rebound has stalled and we may now be headed for a second wave of increased unemployment.
So why is the market up?
1) The market is not the economy.
2) The market is often wrong.
3) The market is looking ahead 12 months and assuming that we will have a vaccination and that enough folks will get vaccinated. This could lead to an expanding economy - more jobs, more demand, growth globally.
But uncertainties exist:
Government funding ends on Dec 11. No one can predict with role Trump may play in a CR.
Over fiscal relief spending ends on Dec. 31. The prospect of a covid relief package - even a minor one will remain in doubt as long as Trump continues to fight the election results.
The pace of vaccination may not keep up with the Covid surge in the next 3-6 months.
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