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Detached from reality? Why U.S. stocks just hit a new high

REUTERS/Bryan R Smith/File Photo

The U.S. economy remains battered by the coronavirus outbreak and Congress is deadlocked on another stimulus bill - yet the U.S. stock market just hit a new record intraday high.

While it may seem like investors have failed to factor in any of the bad news weighing on most U.S. households, there are several key reasons why the stock market has recovered and could continue to rally higher.

“Main Street lives for today, whereas Wall Street focuses on tomorrow,” said Sam Stovall, chief investment strategist at CFRA. “There’s been a massive amount of monetary and fiscal stimulus ... and there’s a rising confidence that pharmaceutical firms are getting closer to a vaccine.”

A finish for the S&P 500 above 3,386.15 - its record closing high from Feb. 19 - would confirm the end of the shortest bear market in history.

18 August 2020

News Source Reuters

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