What are others view of the stock market?
Why is the stock market roaring along despite Covid, unemployment and all of the political issues?
To answer this question, you must be logged in.
Already have an account? Login.
By Signing up, you indicate that you have read and agree to Sage's Terms and Conditions and Privacy Policy
Answers ( 1 )
A more positive longer-term outlook led the stock market to all-time highs in the fourth quarter of 2020, with investors largely looking past the near-term uncertainty of rising coronavirus cases and renewed economic restrictions. Earlier in the quarter however, political uncertainty and increasing cases drove volatility higher in the days leading up to the presidential election. Confidence in the economic rebound ultimately improved as election results became clearer and progress was made in vaccine production. Additionally, the Federal Reserve reiterated its monetary policy support, keeping interest rates historically low. Last, the Federal government passed another round of fiscal stimulus providing another economic boost.
The quarter also brought a rotation of leadership in the markets. Asset classes, sectors and investment styles that have lagged in 2020 but benefit from better economic prospects, such as value stocks (dividend income), began outperforming areas of the market that have benefited from the pandemic, such as growth stocks (capital appreciation). However, the continued spread of the coronavirus, along with a new strain of the virus, continued to pressure markets, serving as a reminder that we are not out of the pandemic just yet.