New York (CNN Business)The remarkable stock market comeback of 2020 has another notch in its belt: Stocks once again turned positive for the year.
Who woulda thunk in March, when the longest-ever bull run in stock market history came to a screeching halt, that stocks would turn positive again just a few months later? The coronavirus pandemic led to the S&P 500 to plunge 34% from an all-time high on February 19 to its nadir on March 23.
Since then, however, the stock market has rocketed back 44%, turning positive for the year for the first time since June 8 and only the second time since February.
The Dow ( surged 550 points, or 2.1%, and the )S&P 500 ( was up 1.5%. The )Nasdaq (, already at a record high, rose 1.5%. )
The stock rocket took off in the early spring as investors bet — correctly — that the Federal Reserve and US Congress would pump the economy full of stimulus. That came in the form of business loans, asset purchases, stimulus checks and other programs that helped keep the economy from collapse.
However, as the US economy reopens, Covid-19 cases continue to set new records after dissipating for a couple months. That has forced some states and municipalities to rethink their reopening plans.
Corporate earnings in the second quarter are almost certainly going to be the worst since the 2008 financial crisis, plummeting 45%, Wall Street analysts predict. JPMorgan Chase (, )Bank of America ( and )Citigroup (, which kick off earnings season this week, are all expected to reveal their second-quarter )profits crashed by 50% or more.
But investors know the second quarter is a wash, and some investors are hopeful that the reopening of some parts of the economy in May and June gave earnings a late-spring boost — not enough to turn them positive, but perhaps not quite as negative as predicted.
Absent a few hiccups along the way, bullish sentiment has certainly returned to Wall Street. Investors are ignoring the dire warnings from governors and mayors that the coronavirus pandemic continues to threaten the economy. If anything, in this “bad news is good news” environment, a worsening economic climate might convince Congress and the Fed to pump companies and consumers with even more stimulus dollars.
Meanwhile, the S&P 500 is only 4.7% away from setting a new record. If this bull run continues, that could happen awfully soon.