Battle of Bad News Versus Massive Stimulus

Over the past two months there has been no gain or loss in the overall market. We are witnessing a battle between bad news and massive government stimulus. The market has seen strong sell offs but the selling is not attracting a following. Stocks have bounced right back following the sharp declines of late.

Underneath the recent wavy, but neutral market surface, there have been large divergences. In fact, the gap between the Dow’s best stocks in 2020, such as Apple (+31%) and it worst stocks, like Exxon (-39%), is a big as it has ever been. Such discrepancies in an time of significant socioeconomic change is not surprising when you think about it.

This separation into the corporate have’s and have not’s is likely to result in the decline of market “indexification”. The rise of index funds has been a dominant force in the stock market over the past twenty years. With the elimination of trading fees and modern technology, it is easier for investors to buy individual stocks today. You do not have to own sinking corporations along with the seaworthy ones that come in an index funds.

Still seaworthy or not, all stocks are facing stormy weather. Let’s hope the sun comes out soon.

 scoop markets, written by professional economists and investors with backgrounds from leading Wall Street firms, breaks down the complexities of the stock market and economy into easy access, digestible morsels. You're busy, but you care about your investments - and it's exhausting keeping up with the stock market.  We solve that problem.  

If you don't like our newsletter, please unsubscribe at anytime. Seriously, no hard feelings.


 Get the weekly email that makes keeping up with the market actually enjoyable. Stay informed, for free. 

© 2020 scoop markets. All Rights Reserved.