Home / Lifestyles / Finances / As economy roars back, S&P Index regains all covid losses

As economy roars back, S&P Index regains all covid losses

Viewed as one indicator of the overall health of the U.S. economy and equities market, the benchmark S&P 500 stock index surged to close at 3,389.78 points on Tuesday. The numbers set a new all-time high record and wiped out all its COVID-19-driven losses for 2020.

After plunging dramatically in late February into a bear market that hit bottom on March 23, the S&P 500 has now completed a full V-shaped recovery, rebounding some 55 percent off the pandemic lows and solidifying its new bull market run.

The index is used as one of several indicators of a recession and, with its rebound and growing quarterly U.S. production numbers, could mean the economy has pulled out of the Covid recession. Economists are waiting on third quarter numbers which are expected to underscore the economy’s rebound.

The closely-watched index, which gets its name from the fact that it tracks the common stock issued by 500 big-cap companies listed on American stock markets, experienced its shortest bear market in history since plunging to its March 23 bottom. The Wall Street icon posted its largest gain in a 103-day period in 87 years, according to Refinitiv data.

“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,” said 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,” he added.

Preliminary closing results show that the Dow Jones Industrial Average fell 67.32 points, or 0.24 percent, to 27,777.59, the S&P 500 gained 7.79 points, or 0.23 percent, to 3,389.78 and the Nasdaq Composite added 81.12 points, or 0.73 percent, to 11,210.84.

Meanwhile, stock analysts at Goldman Sachs have boosted their forecasts for the S&P 500, driven by expectations of a sharp economic rebound in 2021 and a rollout by year’s end of a COVID-19 vaccine.

In a recent research note circulated to clients, Chief U.S. Equity Strategist David Kostin raised his fair-value year-end target for the S&P 500 by 20 percent—from 3,000 points to 3,600.

Kostin referenced recent optimistic headlines around efforts to develop a COVID-19 vaccine, which Goldman analysts expect will translate into above-consensus earnings for S&P 500 listed companies.

Yet downsides to the outlook remain, with Goldman analysts noting the 2020 election and, the chief worry, the course of the pandemic. Many forecasters are nervous about polls that show Joe Biden leading President Donald Trump. The Trump administration is credited with policies that led to the strongest U.S. economy in 70 years with a rebound cut short by the arrival of the Covid-19 virus from China.

“The largest risk to our forecast is the timing of a vaccine and path of recovery from the pandemic,” Kostin wrote, echoing recent remarks by Fed officials, who warned that any economic recovery will be fragile if the virus continues to pose significant threats to Americans’ health.

–Metro Voice and Wire services

Can You Help?

With church, conferences, concerts and other events still cancelled, the advertising that Metro Voice relies on for support has dried up. For 31 years, Metro Voice has been a leader in the faith-based community. We have historically relied on advertising to fund the mission of our publication and sharing the Good News. We are now seeking donation partners who want to support our publication and our mission of faith-based journalism.

Do you like what you read here? Help us continue our mission by supporting Metrovoicenews.com for as little as $1. Every contribution counts, big or small. We sincerely thank you for your continued support and encouragement in these critical times.

Ongoing Support

Monthly Giving

One-Time Gifts