While the economy still has room for improvement, the stock market has staged an impressive recovery. As a supplement to our Weekly Market Commentary, here is an additional report outlining our thoughts around the 2020 market decline and recent recovery.
The U.S. economy is in a recession in the first half of 2020, but barring a significant second wave or other COVID-like event, the economy should show improvement in the second half of the year, and economic and corporate earnings growth in 2021 should be substantially above 2020.
The stock market has already anticipated this return to growth which has been the main driver of the recovery since late March. There are, however, a few gates to pass through to confirm that positive trajectory to include recovery from the current job and business dislocation, U.S. – China political and economic tensions, impact of increased government debt, and, importantly, the 2020 election.
Volatility likely stays elevated as the market votes on daily news headlines and their potential impact.
You can link to the full report here: NovaPoint Commentary – June 11, 2020