The stock market is behaving as if it is immune to COVID-19. It isn’t, but the Federal Reserve’s financial medicine has been a powerful treatment so far.
That monetary balm may be tested in the week ahead as more states move forward on reopening plans while others are forced to revisit their phases.
The coronavirus is not contained across America. More than a half dozen states, including Florida and Arizona, were experiencing an upward trend in their 14-day moving average of new positive diagnoses according to data analyzed by John Hopkins University. While testing has increased, so has the infection rate in some states.
New York Gov. Andrew Cuomo has threatened to reverse reopening efforts in parts of the state if public health safety measures aren’t followed. Meantime, Florida Gov. Ron DeSantis has pledged, “We’re not rolling back” despite rising daily infection rates. New York, North Carolina and parts of Illinois are among the states expected to continue loosening economic restrictions in the new week.
Earlier this month, Utah, Oregon and Nashville slowed their reopening steps after experiencing pick-ups in COVID-19 infections.
The stock market staged a fast rebound from its coronavirus induced crash in February and March. Traders bet on a sharp economic recovery and investors were assured by the unprecedented backing provided by the Federal Reserve. The resiliency of that confidence is being tested by the climbing infections rates in parts of the country.
As the pandemic wears on, it’s understandable why investors and Americans generally are impatient to get to a new normal. The virus and how Americans behave in the new normal will determine what’s next for the markets.
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ABOUT THE WRITER
Financial journalist Tom Hudson hosts “The Sunshine Economy” on WLRN-FM in Miami, where he is the vice president of news. He is the former co-anchor and managing editor of “Nightly Business Report” on public television. Follow him on Twitter @HudsonsView.
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