The stock markets have been unpredictable in the past few months as coronavirus pandemic slammed businesses. As economies have now started opening up again, a positive gain has been observed in the markets. As predicted by market experts, continuous downfall has been coming to a standstill.
The S&P 500 (SPX) closed at an all-time high on Tuesday for the first time since the Covid-19 pandemic hit the United States. As being measured by Wall Street, the index has been hovering in record territories for days but has been falling short of reaching the milestone, but Tuesday was the day when It closed up 0.2%, the first record since February 19. It is an astonishing record as it portrays it took Wall Street only five months to get through the rough trough after the pandemic sell-off in March thus, making the COVID bear market the shortest in history at just 1.1 months, said S&P Dow Jones Indices’ Howard Silverblatt. Stocks fell into a bear market during the spring sell-off.
“It is hard to believe but, the 2020 bear market is officially over” exclaimed UBS Global Wealth Management’s Americas CIO Solita Marcelli in a note to clients. The market climbed high at a combination of unprecedented fiscal and monetary stimulus in response to the pandemic, as well as hopes for a swift economic rebound.
This is bitter sweet news for investors as those who planned to buy more stocks now may not. On the brighter side, the new bull market offers new opportunities to investors.
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Although large-cap US stocks have been climbing higher over the summer, smaller American companies, as well as international stocks, have more room to run. Which, by definition, means that the new bull market only achieved after a 20% rally that doesn’t get undercut within six months. This situation would exist next monthly, too, unless and until there’s a dramatic sell-off.
Many continue to wonder why stocks are at new highs with 10% unemployment and nearly a million people filing for initial unemployment claims. The truth is economic data is backward-looking, and stocks are looking ahead to a much brighter future,” stated Ryan Detrick, Chief Investment Strategist for LPL Finance.
Nasdaq also finished at a record high on Tuesday, up 0.7%, although it only had to overstand Monday’s peak to accomplish the record high. Although, The Dow (INDU) was the odd index out which closed lower, dragging down losses in the energy and the financial sector. It ended down 0.2%, or 67 points. The index remains 6% below its peak.
The market uncertainties and volatility exists due to unprecedented conditions. Thus, making predictions wouldn’t be wise. An investor should choose to portray his aptitude in his/her decisions.
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