Why Have Stock Market and Real Economy Diverged During the COVID-19 Pandemic? [September 2, 2020] [open pdf - 793KB]
From the Document: "During the Coronavirus Disease 2019 (COVID-19) pandemic, the stock market and the economy have experienced major turning points--the economic expansion of more than 10 years ended in February, and the U.S. stock market ended an 11-year bull run in March. While the economy continued in a deep recession, a common U.S. stock market gauge, the Standard & Poors (S&P) 500 index--an index including 500 large U.S. publicly-traded companies and capturing around 80% of market capitalization-- rebounded to higher than pre-pandemic levels as of August 2020. This Insight explores this seeming disconnect between the state of the economy and the performance of capital markets, as illustrated by price movements of the S&P 500."
CRS Insight, IN11494
Congressional Research Service: https://crsreports.congress.gov/