Despite a deadly pandemic that has killed more than 340,000 Americans and left millions jobless and hungry, the stock market ended 2020 with near all-time highs.
The organizations that track the market reported the substantial uptick with these figures: Standard & Poor’s 500 index, up more than 15%; Dow Jones industrial average and tech-heavy Nasdaq are on tracks to gain 6.5% and 43.3%, respectively.
All three indexes touched record levels in the year’s final week, despite the ongoing public health and economic catastrophes.
The market’s uptick enriches the wealthy and caps off a soaring comeback despite the pandemic crisis.
What caused the multiple surges? They were fueled by the largest federal government stimulus ever, historic support from the Federal Reserve and optimism about how quickly the economy is likely to bounce back in 2021 as Coronavirus vaccines become widely distributed.
Rich investors have largely ignored the ongoing pain on Main Street, including pronounced unemployment, overrun hospitals and battered small businesses.
As 2020 ended, nearly 10 million people remain out of work, a jobs crisis worse than anything seen during the Great Depression in the 1930s.
Michael Farr, president of Farr, Miller & Washington, a money management firm, said that “2020 has been stunning. That a pandemic-induced economic shutdown of epic proportion has been digested with stocks ending the year 15% higher is mind-blowing.”
As the extent of the Coronavirus became clear in March, investors sent stocks tumbling 34%, a bear market, but it turned out to be the shortest downturn in U.S. history. Since the U.S. stock market bottomed on March 23, the S&P has risen 66%, shattering all-time records along the way.
By the summer of 2020, the recession was largely over for the rich. U.S. household savings increased by more than $1 trillion.
President Donald Trump has repeatedly heralded the gains, tweeting nearly 50 times about the stock market “up big” in 2020 and predicting a “big crash” if Joe Biden won he presidential election.
In contrast, Biden and his team, including Janet Yellen, his nominee for treasury secretary, stressed that “the stock market is not the economy.”
Employment for low-wage workers remains about 20% below pre-pandemic levels, a staggering decline that has not improved in recent months.
Fed chair Jerome H. Powell has pledged to keep interest rates low for a long time, possibly three years..