Economic Affairs

Soaring market, crashing economy: What's going on?

Support from the US Federal Reserve and other stimulus measures are one reason for the disconnect. Risks lie ahead when some of the props end.

Over the last 85 days, some of us have watched in wonder as the US stock market has risen like a supercharged phoenix from its lows of March 23, before hitting a speed bump on June 11, when the S&P 500 had its biggest one-day drop since March 16. Nevertheless, it is still less than 10 per cent off its all-time high on Feb 19, while the technology-heavy Nasdaq has continued making records.

Let's try to make sense of what is going on, what risks may lie lurking - and what may lie beyond.

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A version of this article appeared in the print edition of The Straits Times on June 17, 2020, with the headline 'Soaring market, crashing economy: What's going on?'. Print Edition | Subscribe