S&P 500 Breaks New Record; Small Business Picture Is Different
Published Friday, August 21, 2020; 8:00 p.m. EST
(Friday, August 21, 2020; 8:00 p.m. EST) It's a tale of two economies: coronavirus hurts small businesses while the tech giants are immune.
The Standard & Poor's 500 closed at a new record high, but the recovery picture in the overall U.S. economy is not as bright.
The 60 leading economists surveyed in mid-August by "The Wall Street Journal" expect a gradual decline in the unemployment rate to 4.9% by the end of 2023.
However, pre-covid, unemployment dropped to as low as 3.5%, and economists don't expect to re-approach that level, "full employment," for at least several years. To be clear, a complete recovery from the pandemic will take years.
Driven largely by the earnings expected of Facebook, Apple, Amazon, Netflix, Google, and Microsoft, the Standard & Poor's 500 stock index closed Friday at 3,397.16, a new all time high.
While the S&P 500 is full valued relative to its historical norm, it's not trading at anything near an outlandish multiple of expected profits. Valuations on stocks are nothing like the tech-stock bubble in 2000.
Even as the S&P 500 booms, however, the broader economy remains less strong than before the pandemic.
"Despite the recent gains in the (U.S. Leading Economic Indicators) LEI, which remain fairly broad-based, the initial post-pandemic recovery appears to be losing steam," according to economists at The Conference Board, "The LEI suggests that the pace of economic growth will weaken substantially during the final months of 2020."
The Standard & Poor's 500 is one of 10 components of the U.S. Leading Economic Indicators. The LEI is a better way of seeing the expected road to recovery and more accurately reflects what's happening in the real economy.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial or tax situation, or particular needs. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.
2022
-
Stocks Have Soared Lately, But What Should You Expect Near And Long-Term?
-
Investing In An Economy Beset By Multiple Anomalies
-
Despite Bad Economic News, Stocks Rose 4% In The Week Ended July 29, 2022
-
Amid Bad Data Releases, Leading Economists Predict No Recession
-
Good News: Real Retail Sales Dropped Fractionally In The Past Year
-
Financial Economic News Analysis
-
The Good News Is All This Bad News
-
Four Signs A Recession Could Be Short And Shallow
-
Odds Of A Soft Landing Shrunk After Friday's News
-
Bad Inflation Surprise Sends Stocks Down Sharply
-
It Could Be A Long, Hot Summer For Investors
-
What A Difference A Week Makes
-
Amid Stock Market Turmoil, +2.3% Growth Projected In 2022
-
Staying On Track Amid The Ukraine And Inflation Crises
-
For Investors, 2022 Is Turning Into A Test
-
Is The Economy Brightening? Or Is The Federal Reserve Slamming The Door On Growth
-
Financial Economic News In Perspective
-
Stocks Closed Lower This Week On Inflation Fears
-
The Main Risk To Investors Now Is Federal Reserve Policy
-
Service Sector Jobs Are Catching Up
-
Stocks Returned +8.3% More Annually Than 90-Day T-Bills In Past 20 Years
-
Perspective Amid A Moment Seeming Fraught With Investment Risk
-
Two Years After The Pandemic Began
-
Turning The Page On A Dark Period In History
2021
2020
2019
2018
2017
2016
2015
READY TO TAKE THE FIRST STEP?
Schedule your no-charge, no-obligation Introductory Phone Call.