1、CRS INSIGHT Prepared for Members and Committees of Congress INSIGHTINSIGHTi i Why Have Stock Market and Real Economy Diverged During the COVID-19 Pandemic? September 2, 2020 During the Coronavirus Disease 2019 (COVID-19) pandemic, the stock market and the economy have experienced major turning point
2、sthe economic expansion of more than 10 years ended in February, and the U.S. stock market ended an 11-year bull run in March. While the economy continued in a deep recession, a common U.S. stock market gauge, the Standard & Poors (S&P) 500 indexan index including 500 large U.S. publicly-traded comp
3、anies and capturing 80% of market capitalizationrebounded to higher than pre-pandemic levels as of August 2020. This Insight explores this seeming disconnect between the state of the economy and the performance of capital markets, as illustrated by price movements of the S&P 500. What Does Stock Pri
4、ce Indicate? At a fundamental level, a stocks price is forward-looking, building on the markets expectations of a companys worth. The price often reflects the current value of a firms expected future profits. Many factors could influence earnings and feed into an analysis of a firms fundamental valu
