Is Wall Street Disconnected From Reality? 

We’ve talked at length here before about how the real economy is a world apart from the stock market, and Wall Street’s history over the past year is another good example of that trend in action.

On February 14, 2020, the Dow Jones Index reached an all-time high of 29,398 points, within striking distance of 30,000. But then the virus began spreading, and with it fear of a recession. By March 20, 35 days later, the Dow Jones had lost a third of its value, plummeting to 19,173 points. All its gains since 2016 had been wiped out at a blow.

To a layman, this made sense; movement in the stock market seemed to mirror what was happening before his eyes. The entire tourism industry had collapsed. Governments were issuing stay-at-home orders to the public. There was no vaccine for the pandemic and certainly not a cure. The future looked very bleak.

But suddenly, a dramatic reversal began in the stock market. In a matter of weeks, the index soared back up. By June it had reached 27,000, within striking distance of the record highs of earlier in the year. And this, as we noted, at a time when people weren’t flying, going to restaurants, or shopping, and millions were still out of work.