The Stock Market is Up While Riots are Raging

by | Sep 30, 2020 | Blog | 0 comments

The economy has lost jobs, the coronavirus is still infecting people, people who have jobs may have taken a pay cut and/or gotten more work to do.  On top of that, there are protests going on because a police officer killed a black man in Minneapolis.  People are stressed and angry.  Meanwhile, the stock market is up.  Why is that?

Jobs Data is Backwards Looking

The job data that is being looked at is showing April’s and May’s figures.  We are now past May, and businesses are opening back up again. There is still a long way to go economically, but we are seeing improvements regarding jobs since March and April during the height of the pandemic.

Job Losses in Certain Sectors

The job losses were in certain sectors.  The highest losses were in business sectors such as hospitality and leisure. Though these businesses have had deep losses, other sectors have seen extreme growth.  Think of things that you may use while you are staying at home such as Netflix or Amazon.  These companies have seen all-time highs with their stocks.  So while some stocks and sectors are seeing big losses, other sectors are seeing big gains.

Federal Reserve Keeps Rates Low

In March the Federal Reserve cut interest rates, and in June, they committed to keeping interest rates low.  In fact, they said they would keep them low at least through 2021.  This is good news for businesses that could use help from the federal reserve.

Other Factors

Other factors that may be contributing to the stock market going up include: the slowing rate of the coronavirus infection; states are gradually reopening their economies.

Before the coronavirus shut-downs that happened to start in March, the economy was doing extremely well.  Unemployment was 3.6% and the economy was growing at an annual rate of 2.1%.  The economy went from one of the best to one of the worst. There is optimism that the economy will come back once companies start opening back up again for business.

What About the Riots

The riots are a symptom of things that are wrong in our country.  Though there is optimism that the economy will rebound eventually, there are signs that not all groups will share the rebound in the same fashion or at the same pace.  Our sympathies go out to those that have been unfairly treated by police officers because of their race or the color of their skin.  What happened in Minneapolis was wrong, and those that are rioting now are looking for fairness. Black Lives Matter, and we at Teton Pines Financial believe that things need to change to make the world a better place.  We are with you in your fight for fairness.

Contact us to help you with your finances during this unprecedented time period.  We can help.