The Economist A dangerous gap has opened between America’s stockmarket and the real economy

Pin Tweet Share Share
From: The Economist this week - Thursday May 07, 2020 05:53 pm
The view on Wall Street is far from life on Main Street, where people are out of work and small businesses are struggling to get cash
   
May 7th 2020 Read in browser
   
  The Economist this week  
 
  Highlights from the latest issue  
   
 
 
   
  cover-image   
     
  Our cover this week looks at the dangerous gap between America’s stockmarket and the economy. In the past few weeks a gut-wrenching sell-off in shares has been followed by a delirious rally. Between February 19th and March 23rd, the S&P 500 index lost a third of its value. With barely a pause it has since rocketed, recovering more than half its loss. At one level, this makes good sense. Asset managers have to put money to work as best they can. But there is something wrong with how far stock prices have moved. American shares are now higher than they were in August, suggesting that the economy can get back to business as usual. There are countless threats to such a prospect, starting with how far the rosy view on Wall Street is from life on Main Street, where people are out of work, small businesses are struggling to get cash and there is the ever-present threat of a second wave of the coronavirus pandemic.  
 
  Zanny Minton Beddoes, Editor-In-Chief  
     
Must-reads from the current edition
 
  Editor’s picks  
 
   
 
 
 
Food security
The tables not yet turned

The global food system is showing surprising resilience to the pandemic. But things could still go awry
Briefing
 
 
 
European law
Seeing red

A ruling by Germany’s highest court undermines the European Central Bank—and with it the EU’s entire legal order
Europe
 
 
 
America v China
Superpowered insults

What do even worse relations between Washington and Beijing mean in practice?
United States
 
 
 
The business of health
Prognosis: mixed

America’s health-care industrial complex is being recast: our guide to the winners and losers
Business
 
 
 
Scientific publishing
High-speed science

The pandemic has caused scientists to publish their work faster. That should be welcomed
Leaders
 
 
 
El Salvador
Millennial dictator

Nayib Bukele is weakening institutions and empowering his family
The Americas
 
 
 
Virtual dating
Casual sex is out, companionship is in

Lockdowns are forcing singletons to embrace emotional intimacy
International
 
Reversing course, Donald Trump said that America‘s coronavirus task-force would continue, but also focus on rebooting the economy. More states began easing their lockdowns. Florida allowed shops to trade if they limit customers, except in the heavily populated corridor between Miami and Palm Beach. In Michigan, the scene of rowdy anti-lockdown protests, the Republican legislature refused a request from the Democratic governor to extend her stay-at-home order. She extended it anyway.
 More swingeing job cuts were announced in the aviation business, an industry that has been hammered by the restrictions on travel. General Electric said 13,000 jobs would go in its aviation division; Rolls-Royce, which makes engines for Boeing and Airbus, was reportedly considering 8,000 lay-offs; Virgin Atlantic announced plans to reduce its workforce by a third and close its operations at London Gatwick; and Ryanair said it would reduce its headcount by 15%. Michael O’Leary, Ryanair‘s abrasive boss, criticised the recent government rescues of Air France-KLM and other carriers as “state-aid doping” for weak airlines.
 
  The world this week
  
     
   
     
  More from politics this week  
     
   
     
  More from business this week  
     
See full edition
One of our most popular stories from the past seven days
 
  In case you missed it  
 
   
 
 
image of
 
Daily chart
Covid-19 has become one of the biggest killers of 2020

This year its global toll exceeds that of breast cancer or malaria
 
 
  From Economist Films  
 
 
 
Film
How to stop plastic getting into the ocean?

Plastic pollution poses a major threat to ocean life. Meet the engineers who are using rubbish-guzzling boats to stem the flow at its source
 
 
This e-mail has been sent to: newsletter@gmail.com
If you'd like to update your details please click here (you may need to log in).
Replies to this e-mail will not reach us.

If you no longer wish to receive this newsletter, unsubscribe here.

       
 

 
 
 
Advertising Info | Privacy Policy | Terms & Conditions | Help

Copyright © The Economist Newspaper Limited 2020. All rights reserved.
Registered in England and Wales. No.236383
Registered office: The Adelphi, 1-11 John Adam Street, London, WC2N 6HT
 
  
© Copyright.