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Nir Kaissar

Stock Market Has Almost Always Ignored the Economy

There has never been a reliable relationship between equities and GDP or the broader political or social environment.

Estranged bedfellows.

Estranged bedfellows.

Photographer: FPG/Hulton Archive/Getty Images

The U.S. stock market is fiddling while America burns, or so it seems to a lot of people. 

The S&P 500 Index has surged 45% since it last bottomed on March 23 through Monday, based on closing prices. It’s up 8% since protests began on May 27 in response to the death of George Floyd in police custody in Minneapolis. And it’s just 5% off its Feb. 19 record high — less if you include dividends. Meanwhile, the U.S. economy is beset by a continuing coronavirus shutdown and widespread social unrest. Against that backdrop, the market’s relentless march higher seems delusional to many.