Simply enumerating the crises afflicting the United States this year is an exhausting job.

Consider that the country has already experienced a presidential impeachment trial, the onset of a tenacious coronavirus pandemic and a grave recession. Add to all of that the heartbreaking video recordings of police officers killing people of color, which vastly amplified the power of the Black Lives Matter movement and led to a presidential threat to unleash armed forces in the streets.

Enough already, right? But there’s more. Even if, by some serendipitous twist, the shocks of 2020 stopped right now, the United States would face predictable traumas already locked in the calendar — most notably an election season of monumental vitriol and consequence that has barely begun.

What’s just as extraordinary as all of this is the stock market’s reaction to it. Stocks over all are down slightly for 2020, and if you haven’t been following closely, it may look as though little has happened in the world. But the numbers plainly show that the market has been traveling in rare and, in some ways, troubling territory.

Recall that in the first three months of the year, as the pandemic and its economic consequences set in, stocks had a calamitous decline. Then, after the Federal Reserve announced an intervention in late March, the stock market soared even as the economy sank.

Equities have seldom moved as sharply down and then up, from quarter to quarter, as they have this year. Calling the stock market a “roller coaster” is a cliché, yet if the term were ever apt, it would be so now.

This particular sequence of extreme movements — a remarkably bad quarter, followed by a remarkably good one — makes this market noteworthy from a historical standpoint.

In the United States since 1928, there has been only one instance when the stock market declined at least 20 percent in one quarter and rose at least 20 percent in the next, according to data supplied by Bespoke Investment Group, an independent market research firm. That was in the heart of the Great Depression in 1932, an era of misery and staggering unemployment. It’s not a year that anyone wants to see again.

But in financial markets, this year has looked painfully similar. The S&P 500 was on track to echo the market of 1932. After falling 20 percent in the first three months of this year until June 21, it had risen more than 21 percent in the second quarter.

Stocks have declined a bit since then, amid new flare-ups of the coronavirus and fresh warnings about the weakness of the economy, and the quarter doesn’t end until June 30.

Even so, the stock market is flirting with an unenviable distinction. Stocks have declined at least 15 percent in one quarter and risen at least 15 percent the next only eight times, and seven of them were during the Great Depression. (The singular post-Depression quarters were in 1970, during a Nixon-era recession.)

It would be easy to simply rejoice at the market’s outsize gains. But there were far better quarterly returns — two quarters with gains of more than 80 percent — in 1932 and again in 1933, back in the Great Depression.

These echoes of the Great Depression are disturbing for many reasons.

It’s not just that unemployment stayed above 12 percent for nine years in that dismal period, or that, despite some periodic improvements, the economy was mired in a long-term slump that didn’t end until World War II.

As the economist Robert Shiller has written, the enormous gains that recurred several times in the stock market of the Great Depression were accompanied by periodic crashes and longer-term stagnation that could have swept any profits away. It was an inauspicious moment to be a buy-and-hold investor.

In fact, despite those glorious streaks in the 1930s, it took 20 years for the stock market to rise above its 1929 peak and stay there, when you include dividends and inflation, Professor Shiller has found.

Imagine if that happened today. Investors would be living in a world of pain. It wouldn’t be until 2040 that the stock market crossed the peak reached in February (again, dividends and inflation included).

Such parallels can be overdrawn, of course. For comfort, emphasize that the current era is very different.

“What’s unique about this period is that the stock market is hostage to the health data,” said Paul Hickey, a co-founder of Bespoke. “Coming into the fall, I think, the economy and the stock market are going to be dependent on how the health numbers come out, and unfortunately none of us know the answer to that.”

  • Updated June 24, 2020

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How many people have lost their jobs due to coronavirus in the U.S.?

      The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


It is quite possible that once the coronavirus pandemic is behind us — whenever that may be — the stock market and, more important, the real economy will flourish. Those assumptions are certainly built into current stock market prices.

But pockets of irrational exuberance clearly exist. Hertz, as I wrote recently, is in bankruptcy but wanted to sell new stock anyway, saying quite openly that there was a good chance the stock would be entirely worthless. The Securities and Exchange Commission raised questions about that stock offering, and Hertz canceled it.

But Hertz’s assessment of the stock market climate seemed on the mark. It wanted to take advantage of a “unique opportunity” — the current day-trading frenzy.

Thanks in large part to the Federal Reserve’s intervention in the markets since late March, risk-taking abounds, sometimes in willful disregard of unappealing stock valuations. As I’ve pointed out, the market has often operated as though the current problems of the world, and of public companies, were irrelevant.

Even when stocks make sense in the pandemic, exuberant traders have been pushing prices to stratospheric levels. Zoom Video has become a household name because of the coronavirus, but its earnings are small. Does it really merit a price-to-earnings ratio of 1,421.4 — Apple’s is 28.3 — and a gain this year of more than 270 percent?

Depending on your point of view, traders have either ignored the economic devastation wrought by the coronavirus — or had the wisdom to focus on the earnings that will flow once the pandemic ends.

Critiques of current market prices are increasingly common. David Solomon, the chief executive of Goldman Sachs, said on Wednesday, “The equity market does seem to be a little bit ahead of my view of the future earnings performance of businesses.” He added that he expected price declines “over time.”

Stay strong. The year isn’t even half over.

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