The Post-Virus Comeback? A Look at the Stock Market’s Stunning Recovery

We’ve written here before about how the stock market seemingly is following COVID-19 treatment and vaccine developments as it pertains to its ebbs and flows as of late. And now after another good week on Wall Street, there’s increased optimism that things could rebound faster than what has been feared.

To our previous point, some of this likely has to do with optimism that there could be a vaccine before year’s end. It’s let some analysts to question whether we’re in a bear market rebound or whether a new bull market is forming. Currently, the S&P is down about 15 percent from its February high after climbing back up from 35 percent down.

Let’s take a closer look at things:

Bear vs. Bull Market

Before we get into diagnosing the market and the gains Wall Street has made since its March low, let’s first quickly review the difference between a bull market and a bear market. A bull market is one that is on the rise, while a bear market is one where stocks are decreasing in value. While a bull market is ideal, a bear market shouldn’t be a cause for panic under normal circumstances. That’s because it can lead investors to shore up their strategies and reassess both their short and long-term goals.

What Type of Market Are We In?

Most experts believe that we’re currently in a bear market rally after a few weeks of success on Wall Street. However, there is the possibility that we can get back to a bull market, but if – and only if – the market can recover to match its February high. As we noted in the opening, it’s currently sitting at about 15 percent below that February high. However, the market has recovered some 60 percent of its initial loss.

Breaking the Rules

But most experts are also quick to note that this is far from a typical bear market, and bear market rally for that matter. Experts tend to thing of this as an event-induced phenomenon that consisted of a near-immediate slicing of some $10 trillion in market from a Wall Street record. The event, of course, is the COVID-19 pandemic – and the subsequent ebbs and flows the market has experienced since its late March low point have largely been because of the government’s and medical science’s response to dealing with the impact of the virus that’s swept the globe.

Though we didn’t quite expect a pandemic to be what took Wall Street out of a decade-long bull market, investors see a positive in this current rally for stock upside in the near-term. And while there are certain to be more ebbs and flows throughout 2020 and it’s likely that we won’t again reach those February highs in this calendar year, things are looking up on Wall Street. The current market has been resilient to an extent, and it’s evidence that there’s some room to give as things return to some sense of normalcy.

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