After a 700-point drop towards the end of June, the stock market is once again on the comeback trail. Like an ICU patient monitor, stock futures have accompanied the coronavirus pandemic into its peaks and valleys. From a high of over 29,000 in February, the market dropped over 10,000 points in April as the coronavirus took hold in the U.S.
Climbing back to almost 27,000 in late June, the Dow dropped over 700 points as Americans precipitously tried to get back to normal. A new surge in coronavirus cases proved that social distancing and continuing quarantine were the only way to fight the pandemic — at least until a cure or a treatment could bring the infection under control.
The market has recently recovered from that 700-point setback. Stock futures are again trending towards added gains.
The Proof is in the Performance
As stocks continue their upward trend, other positive indicators include:
- European markets are doing better. Markets in London, Germany, and France are up.
- Asian Markets — Japan’s Nikkei, Hong Kong’s Hang Sen, and China’s Shanghai Composite — have seen gains.
- U.S. communication and technology stock shares and companies that depend on consumer spending are trading higher.
- The market comeback is encouraging investors to shore up their stock portfolios as oil prices slowly rebound.
So, the Dow always looks ahead, and it is tending towards optimism. A coronavirus cure will have a salutary effect on when — as well as how — the U.S. and world economy regain their boom times and everything returns to normal. As of July 21, stock futures were trending towards added gains. Those gains are based on reports of promising coronavirus vaccine tests and another federal government stimulus package.
Vaccine Tests Show Promise
Scientists around the world are working feverishly to develop vaccines. Four promising vaccine candidates are on the horizon, but are still in early phases of trial. Initial trials must focus on safety and dosing. Once that phase is passed, large-scale trials are next.
The good news is that the candidate vaccines have shown to be generally safe. They show promise in doing what vaccines must do: trigger an immune response by fooling the body that it has been infected and causing it to produce antibodies. More good news is that research so far has led to the next stage in efficacy trials. That’s where volunteers either get a dose of the trial vaccine or receive a placebo. Then the groups are compared.
Injecting Another Stimulus Shot
Wall Street is looking for another type of inoculation: another infusion of stimulus checks. Lawmakers in Washington, DC are cobbling together another stimulus package in hopes of cushioning another economic downturn. Their target date is August 1, when the current federal unemployment subsidies are due to expire.
So, if the past six months of volatility in the stock market have proved anything, it is what market investors have always known: stock investments can be a roller coaster ride. Successful investors are those who stick around for the long haul.
