Saturday, April 18, 2020
Stocks Rally After Talk of Reopening Economy
Stocks recovered this past Friday from talk about reopening the economy. Investors seem undeterred by the economic damage caused by the COVID-19 pandemic. President Trump said he hopes to have businesses back open by May 1st. This will be the first attempt at a large-scale resumption since we have gone into quarantine. As a result from this news, the S&P 500 rose 2.7 percent, and Boeing led the Dow Jones industrial average with a 3 percent rise. This leaves the S&P 500 28 percent above this year's low, but still 18 percent below its high. Additionally, China has reported that their economy has shrank for the first time in decades. The jump in stocks is believed to be a result of recent medical news.
In a recent clinical trial by Gilead Sciences, the antiviral drug, remdesivir, was reported to have helped patients recover quickly from severe coronavirus symptoms at a Chicago Hospital. As a result, Gilead's stocks have increased by nearly 10 percent. This gives some security and hope to citizens.
Do you think it is a wise move for the economy to begin to reopen? Should we have fears of a second wave? Do you believe the medical field is ready if we end up having a second wave?
https://www.nytimes.com/2020/04/17/business/stock-market-live-coronavirus.html
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3 comments:
I do not think it is safe to open the economy right now, at least wait till scientists and healthcare professionals provide a timeline. In all honesty, cases have reduced but not stopped due to extensive measures. We should wait til the caseload decreases to zero because we still do not have any cure.
It is not time to re-open the economy yet. It needs to be done in phases, as outlined in the Roadmap to Pandemic Resilience released by the Harvard Edmond J Safra Center for Ethics. If we reopen now, we will certainly have to close once again -- and again, and again. We must be cautious and deliberate about how we relax social distancing restrictions in order to prevent a second wave and "tread water" until there is a vaccine that is readily available, which will likely not be until 2021, even optimistically.
I do think that strictly economically speaking, yes it is probably the time to reopen the economy because people need to start making money, especially since bills cannot be postponed forever. People are beginning to run out of money and people have to pay bills. However I do agree that more damage will be done in the long run if we try to reopen top soon and there is a second outbreak. The medical field is not prepared to deal with more outbreaks and the economy can absolutely not stand another quarantine. But hopefully people will still stay inside and prevent the spread of the pandemic.
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