Right now, the stock market has been through a rocky first half of the year. Amidst the coronavirus pandemic the market dropped by over 34% on average in late February only to then skyrocket back up for the highest increase over a 50 day period in the history of the market. Dustin Stanley, independent retirement planning advisory of Strategic Wealth Designers joined WDRB in the Morning to talk about the three biggest factors affecting the financial markets right now. He says the continued coronavirus headlines slates in at the top of the list.
“We started thinking we were heading in the right direction with a peak at about the end of April, we started re-opening states and attempted to resume life as we know it,” Stanley says. “We’re testing a lot more people now and the numbers have gone up, but if we start rolling things back and shutting things down again – the market is going to react and it’s going to react negatively.”
The second key contributor to how the financial markets will move forward will be based on what earnings reports show for major companies across the United States. The stock market attempts to factor in the potential losses companies are going to incur but until the actual numbers are reported there isn’t certainty as to exactly how bad things will be.
“Companies have two values: They have the perceived value of what we think their stock should be worth and then we have their actual valuation when we look at their earnings reports released each quarter,” Stanley says. “Second quarter we are going to see all the shutdowns, there are a few outliers like Zoom or Amazon but for most businesses their earnings are going to be way down, and their stock prices will react accordingly.”
The final key factor is getting a vaccine in place and the market sees a reaction based on every piece of news released on the clinical trials that are going on. Stanley says while a small jump or a small decline may occur with each days’ news. Overall, it will be a flatline until a vaccine is ready to be deployed to the masses.
To learn more about this financial topic and all market updates visit https://WDRB.com/MoneyMatters
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