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Market Commentary – April 2020

May 7, 2020

The Stock Market is Not the Economy

The economic fallout from the coronavirus crisis ramped up in April. Since the start of the crisis, the U.S. has lost over 27 million jobs, and the unemployment rate is estimated to be 17%.3

If one Wall Street adage explained April, it’s this: “the stock market is not the economy.” Although April was one of the worst months for the economy on record, it was also the best month for the stock market in 33 years.

The sustainability of this disconnect is unclear. Are investors looking beyond the current economic wreckage and anticipating a swift and full recovery, or conversely, are they simply caught up in a liquidity-fueled buying spree that will eventually stall out or fail as the long-term consequences of the pandemic become clear?