Stocks Hit New Highs As S&P500 Wipes Out Pandemic Losses in Just Five Months
The benchmark S&P 500 closed at 3,389.78 points on Tuesday, marking a new record-high for the index and effectively gaining back everything it lost due to the coronavirus pandemic.
According to Fox Business, better-than-expected earnings from the retail sector and strong housing data drove this surge in stocks.
After sinking to bear market territory that bottomed out on March 23, the broadest measure on Wall Street completed a full turnaround, recuperating about 55 percent and sparking a brand new bull run, right smack in the middle of the world’s worst crisis in decades.
Shortest Bear Market in History
CNN reports that the record is noteworthy because it means Wall Street only needed five months to pull itself up from the selloff in March all the way to a fresh peak. Looking at historical data, the COVID-driven bear market turned out to be the shortest ever.
“It’s hard to believe, but the 2020 bear market is officially over,” mused Solita Marcelli, CIO of UBS Global Wealth Management in America. “This is bittersweet news for some investors, who had hoped for another opportunity to buy more stocks on another market decline. On the bright side, this new bull market still offers opportunities for investors.”
Still, none of this means the American economy is completely out of the woods.
“The S&P 500 has been impressive and has created a lot of wealth, but I am not sure that reflects the overall health of the economy,” explained Patrick Leary, chief market strategist at Incapital. “The rally has more to do with asset inflation, which is fueled by all the liquidity and all the continued support in the economy as well as the weakening dollar.”
Be that as it may, Merk Investments senior analyst Nick Reece said the rally we’re seeing has enough legs to stand on.
“While near-term downside volatility may be likely, my base-case view is that we’re in an ongoing secular bull market,” he told The Epoch Times. “The medium-term outlook continues to be supported by leading economic indicators, a high remaining wall-of-worry, high allocations to cash, and by revisions to earnings expectations.