Refer to part 1 here, a post I written close to 2 months ago to show the disconnect between Wall Street and Main Street. To a large extent, this disconnect means that the stock market is no longer directly proportional to the economy. Despite the ailing economic situation in the US economy entering into a recession with record high unemployment, the stock market continues to rise. The 3 major indices of NASDAQ, S&P and Dow Jones are only a few percent lower than its all-time high seen in February. All indices had stormed upwards >30 percent since hitting the low in March. In spite of more recent bad news such as, the continual rising number of corona-cases, the protest of George Floyd’s death and souring US trade tensions with China, the stock market seemed impervious to bad news.

RECAP PART 1

In Part 1, I mentioned that one key reason of the disconnect