Varney: 4 reasons the stock market is at or near all-time highs
What we have now is something extraordinary: record-high stock prices in the middle of a pandemic
Open up your 401(k) and smile.
Who would have thought just four months ago that your investments would have turned out quite like this: stocks at or near all-time record highs? 18,000 for the Dow in late March, 27,000 in early August.
What is going on? Let me give you the straightforward answer, as opposed to Wall Street's convoluted, jargon-laced answer.
First, trillions of dollars are being thrown into the economy -- and there's more to come. Let's not get technical, but some of that money ends up on Wall Street. That's how it works.
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Second, all those trillions have had a stimulating effect on the economy, and that's good for stocks. We shut the economy down in the spring, and it's rebounding in the summer. The market is rebounding with the economy.
FILE - In this June 30, 2020 file photo, a woman wearing a mask passes a sign for Wall Street during the coronavirus pandemic. (AP Photo/Mark Lennihan, File)
Third, vaccines. Drug companies confidently predict an effective, mass-produced vaccine by the fall, October or November. That is a prediction, but there are 19 drug companies on the Trump administration's Operation Warp Speed list -- 160 worldwide, working on a vaccine.
By the way, here at home, the number of new virus cases is down 18% over the last two weeks.
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That brings us to rally reason No. 4. We are looking to the other side of the coronavirus pandemic. There may be worries over a second wave, and it's very doubtful we'll return to "normal" for years. But all over the world, economies are expanding again. That's produced a worldwide rally, not just Wall Street.
I'm not going to dismiss election risk. And I'm not forecasting a never-ending upward ride. But what we have now is something extraordinary: record-high stock prices in the middle of a pandemic, three months before an election.
Enjoy it. After what we've all been through this year, more money in your 401(k) is a wonderful thing.
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Adapted from Stuart Varney's "My Take" monologue on "Varney & Co." on Aug. 11, 2020.