EC Stock Market Predicting Bullish Economy In 2021

Well, here we are on the last day of one of the worst years in recent memory. The COVID-19 pandemic came out of nowhere and devastated the US economy, with millions of Americans losing their jobs in the first half of this year. Unemployment soared at a record rate for several months, with many jobs lost permanently. The scars on the economy were unprecedented.

Yet the US stock market which suffered its worst one-month loss in history, down 34% in March, came roaring back in the months which followed, soaring to new all-time highs last summer. And it has continued to hit new highs time and time again since then.

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So while the COVID-19 death toll is staggering at over 300,000 in the US this year, the stock market is telling Americans to be optimistic about 2021, experts say. Why? The economy is expected to continue recovering with a vaccine created in less than a year. And Wall Street professionals expect another good year for investors.

Despite the record plunge in the 1Q, now that we’re back at record highs, it’s a harsh reminder to people that the stock market is a forward-looking mechanism that currently sees better times ahead. You may agree or disagree, but the stock market’s meteoric rise this year should not be ignored.

Unfortunately, many investors bailed out of the markets in March and April, as always happens in sharp declines, and many missed the historic recovery in the balance of the year. Some still remain fearful about the trajectory of the economy as unemployment remains elevated and COVID-19 cases are spiking this winter, threatening further business closures.

The Economic Recovery May Have Years To Run

Still, the economic expansion which began in the summer may have years to run, experts say, and that typically fuels further stock gains, helped in part by strong corporate profit growth. The length of economic expansions has averaged 5.3 years since data have been kept, according to the National Bureau of Economic Research, which anticipates a more gradual recovery ahead after stocks snapped back this year following the sharp sell-off in March.

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