economy
WITH ITS EBBS AND ITS FLOWS, THE STOCK MARKET GROWS Disconnected from reality, or totally intuitive? Regardless of your perspective, the truth is that stock markets have performed shockingly well.
Back in February, all of the major stock market indices were at all-time highs: at its peak the Dow Jones Industrial Average closed just below 30,000, the NASDAQ was a shade under 10,000, the S&P 500 could almost touch 3,400, and the Toronto Stock Exchange, or TSX, peaked just below 18,000. It was heady times for equities investors (and whether you know it or not, you were, and are, likely to be an equities investor). March brought considerable turmoil to these, and other, indices, which plummeted by up to 40% into the middle of the month as
the bottom fell out of the global economy. Then something remarkable happened. Over the ensuing five months, virtually all indices recovered (on the back of technology stocks), withall indices at, or very close to, their levels at the opening of 2020. This is more than a simple curiosity for housing markets: with stock market-based savings preserved for the time being, most would-be buyers—from first-timers to down-sizers—are as able today as they were pre-pandemic to participate in the for- sale market.
FROM LOW TO HIGH: EQUITIES MYSTIFY
1.40
1.31
NASDAQ UP %
1.20
1.19
1.00
STOCK MARKET VALUES ON JAN
1.03 0.95 0.96
1.00
0.80
0.64
DOW JONES DROPS %
0.60
0.40
0.20
0.00
JAN
FEB
MAR
APR
MAY
JUN JUL
AUG SEP
S&P
TSX
NASDAQ
DOW JONES INDUSTRIAL AVERAGE
DATA: INDEXED STOCK MARKET INDICES JAN .
SOURCE: YAHOO FINANCE
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