The Business Update with Vivian Benishek
Monday, June 8, 2020
The U.S. Economy Rallies On: Stocks and Work and Cash, Oh My!
“People don’t buy stock; it gets sold to them. Don’t ever forget that.”
― Jordan Belfort, The Wolf of Wall Street (2007)
Note: Information current as of Monday, June 8, 2020.
Over the past couple of months, many traders across the United States have been victims of sleepless nights, lying awake while pondering the triumphs and tragedies of the future of America’s stock market. Amidst the chaos of COVID-19, it is easy for a business person to lose confidence in their money-making abilities or struggle with the decision of whether to return to work in the post-coronavirus office. However, this past week (June 1st) started off the new month on an upbeat note, one that surprisingly foreshadows potential opportunity, growth, and prosperity. It is evident that Wall Street, buried deep beneath an economic crisis, has been brought back from the dead. According to CNBC, the U.S. stock markets surged on Friday, June 5th after data showed the economy added an unexpected 2.5 million jobs in the month of May, which was much higher than economists predicted. U.S. News & World Report stated that “leisure and hospitality, construction, and even the retail space each saw renewed hiring.” Another optimistic figure spikes from the S&P 500, which is a stock market index that measures the performance of 500 large-cap U.S. companies. For the first time since Monday, May 18, the S&P gained 82 points (2.62%), which marks its best daily performance. Shareholders have breathed a sigh of relief knowing that it will close to breakeven for 2020. Further, The Wall Street Journal reported that the Dow Jones Industrial Average “jumped more than 800 points, or 3.2%, extending its gains for the week to 6.8%.”
Now let’s snap back into the devastating reality of our current world. Unfortunately, not every American life has been touched by this good economic fortune. The unemployment rate is still near a post-World War II high of 13.3% and the workforce has been hit disproportionately, especially among black workers. In fact, according to the Pew Research Center, only 31% of black families have invested in stocks compared to the 61% of white families. But the stock market has always been composed of different worlds that favor or leave out certain individuals. It doesn’t truly care about morality, economic inequality, or a global pandemic. It is designed to keep moving forward. Michael Arone, chief investment strategist at State Street Global Advisors in Boston, stated that “the numbers are a huge surprise to the upside” and that “this is a strong signal that the effects are temporary and that the economy is improving.”
Is there a light at the end of this very dark tunnel? That’s the million-dollar question. Hopefully there is a quicker-than-expected recovery and our economy will overcome the many challenges thrown in its direction. Whether you are on the verge of a nervous breakdown or maintaining optimism, never forget that with uncertainty comes risk and with risk may come reward. Stay keen, observant and faithful that our stock market will reach new heights if a rebound comes along. Again, “if.” But for right now, there are some signs of economic gain.
Long may it last.
That’s it for this briefing. See you next time!
Comments