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Why the stock market just doesn’t care

  •   2 min reads
Why the stock market just doesn’t care

The events of the last two weeks just haven’t dented the bull market. In the days since a police officer pressed his knee to the neck of George Floyd in Minneapolis for 8 minutes and 46 seconds, news of protests and crackdowns have vied with the pandemic and the recession for narrative primacy. Yet most stocks have been levitating. The New York Times

Towns and cities across the United States have been convulsed in protest against police killings of black people. The president has declared that he is prepared to deploy the United States military to “dominate” the streets — while his secretary of defence says he opposes using military force against American civilians.

An important caveat: Many people are extremely concerned about morality among the companies traded on the stock market. Many excellent initiatives are underway, through proxy voting and governance campaigns, to propel corporations into socially progressive orbits. I’ve written that investors can pay far closer attention to these issues — and apply much more pressure to wayward companies — than most of us routinely do. Getting index funds to exercise proxy votes more responsibly, on our behalf, is one important option. In short, it is possible to do good and do well in the stock market.

The New York Stock Exchange on Jun 3, 2020, when the S&P 500 marked its best 50-day performance. The events of the last two weeks just haven’t dented the bull market. The New York Times That outlook is helping traders put a positive spin on the economic data that is pouring in. The American economy gained 2.5 million jobs in May, the government reported on Friday morning, a big improvement over the 20.5 million lost in April. Why not emphasise the positive and bid stocks higher?

David Rosenberg, who runs a market research firm in Toronto, argues emphatically that whatever the short-term movements of the market, major declines and an extended economic struggle will be coming. He compared the current rally to the rebound that began in November 1929 and lasted until April 1930. The market gained almost 50% in that period, he said, but no one remembers it. What we remember is the Great Depression.

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