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Over-stimulated? Shares are up 75% in the last 12 months

NEW YORK (AP) – It was a year ago that the frightening free fall for the stock market abruptly ended, starting one of its biggest runs.

On March 23, 2020, the S&P 500 fell 2.9%. Overall, the figure fell by almost 34% in about a month, wiping out three-year profit for the market.

It turned out to be the bottom line, although the coronavirus epidemic worsened in the months that followed, and the economy plunged deeper into recession. Federal Reserve և A large number of stocks restricted by Congress to support the economy. The market recovered all its losses by August.

As time went on, the rapid development of coronavirus vaccines helped keep stocks higher. So did the growing legions of investors, who suddenly had plenty of time to enter the market using free trading software on their phones.

Everything led to a) 76.1% growth in the S&P 500 ին a shocking return to record highs. This race for the S&P 500, if not one of the best 365-day segments, seems to be the second before World War II. According to end-of-month data, the S&P 500 last rose 12 months in 1936, according to Howard Silverblatt, senior analyst at S&P Dow Jones.

All the sharp moves have also raised concerns that stock prices may have gone too fast. Here are the trends of the last five years that have helped shape the market.


The big Wall Street rally actually had two definite stages. Tomorrow, Big Tech Shares ակի Suddenly Household Winners Raised the Market. Amazon won as more people shopped online, Apple increased sales as more people worked from home և Zoom Video Communications grew as students and adults began meeting online. Technical stocks, as a group, have the highest market value, so their profits have weakened other industries as the economy has struggled.

Since last fall, however, the excitement of economic growth has become more widespread. Banks, energy producers, small companies, the profits of which will be the biggest beneficiaries of a stronger economy, have moved forward as coronavirus vaccines spread, and Washington is providing even more financial assistance. These gains are also accelerating the slowdown in technology stocks, which have lost momentum as interest rates rise amid fears of higher inflation.


With little to do at home, people were looking for ways to spend some dollars that might otherwise be spent on a movie, a restaurant lunch, or a vacation. Many used their phones to access the stock market, as trading programs made it easier to buy and sell stocks with a few clicks at no commission.

Last month, Charles Schwab accounted for 35% of all 40-year-olds, which is almost twice as many as two years ago. Less than a year accounts generally do more trading in Charles Schwab than accounts that are more than 10 years old.

Many of these traders used the money they received as incentive payments from the US government. Robinhood, a popular trading program for many start-ups, saw interest rates rise to exactly $ 1,200 or $ 2,400 after the government sent in cash checks last spring, for example, shortly after it hit the bottom of the stock market. A new round of government payments of $ 1,400 to individuals is under way.

Social media has only intensified the trend, as traders on Reddit, Twitter and elsewhere talk about what stocks to buy. They helped to raise the stock market widely, but their impact was most evident when they became known as “meme stocks”. For example, in January GameStop grew by 1.625%, despite the fact that the retailer of video games was in financial difficulties. Earnings from GameStop, AMC Entertainment and other meme stocks ignored gravity, and almost every professional investor on Wall Street thought it was reasonable.


All the stock market frenzy has caused concern across Wall Street that prices have been too high. Much of the criticism has focused on how fast stocks have risen rather than corporate profits.

Another possible signal of excessive greed and insufficient fear. Investors are so hungry for the next big thing that they invest billions of dollars in investing until they even know what that money might be worth. These investments are called special purpose acquisition companies, although they are better known by their acronyms – SPACs. Armed with cash collected from investors, SPACs are looking for private companies to buy so that the company can easily list its shares on the stock exchange.

SPACs raised $ 83.4 billion last year, more than six times last year. This year, they have already exceeded that level in less than three months.

– Global Recovery

Coronavirus does not really know geographical boundaries. As it devastated the population and economy around the world, the global financial markets suffered severe losses.

The restoration has taken place all over the world. Shares from China, South Korea and other emerging markets as a group are growing at almost the same percentage as the S&P 500 as of March 23, 2020. Japan Nikoniai 225 index of aponia is also growing by the same amount.

European markets lag behind, although they perform much better when viewed in dollars instead of euros. Deteriorating infection rates are causing “third wave” unrest on the continent, forcing governments to reinstate some restrictions on daily life. But the hope is that the continued spread of vaccines will benefit farms, and trade will return to normal around the world.


Even with so many first-time investors entering the market, not everyone benefits from stock growth. In 2019, just over half of all US households owned shares, with independent trading shares or a S&P 500 index fund of 401 (k).

Similarly, not all stocks have contributed to market growth over the past year. Shares inside the S&P 500 are actually lower, according to Gilead Science, which is down 9.8%. Shares rose at the start of the epidemic as its remedivir drug became a cure for COVID-19, but fell in part due to fears of expiring patents.

Other early shareholders in the epidemic were also delayed after the market went live a year ago, including Clorox, whose disinfectant wipes looked like currency, and Hormel Foods, a spam maker.


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