The New York Stock Exchange.
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The financial markets are rising and the economy is falling. What is with this disconnect between the two? Many investors may be asking themselves if this is all a cause for concern.
So, what’s an investor to do?

To begin with, the financial markets were doing quite well before the pandemic. In fact, the S&P 500 Index closed at a record high (3,386) on Feb. 19. But once Covid-19 cases started spreading in the U.S., the markets plunged. By March 23, the S&P 500 had fallen about 34%.
Fast forward a few months, however, and the numbers tell a different story. By the end of the first week in August, the S&P 500 had risen nearly 50% since March 23, regaining almost all the ground it had lost.
Meanwhile, at the same time of this market rally, the overall economy took a hit.
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In fact, gross domestic product fell 9.5% in the second quarter of the year – the largest quarterly drop since 1947. If businesses are producing and selling fewer goods and services, shouldn’t it follow that the accompanying damage, in the form of massive lost revenue, would also lead to a sharp decline in the stock prices of these businesses?

There’s something of a time warp between what’s happening in the economy and the performance of the financial markets. Essentially, the economy is a reflection of what’s happening today, but the markets are always looking toward tomorrow.
This pattern can be seen in recent market action. The 34% sell-off in February and March took place when unemployment was near 50-year lows, as the market declines reflected concerns over the growing pandemic and the anticipation of the resulting recession. But now, stocks have rallied in expectancy of a better economic environment in the second half of 2020 and into 2021 as economic activity recovers.

Here are a few reasons for the market’s optimism:
Gradual improvement in corporate profitability: Corporate profitability – always a key long-term driver of stock prices – will likely show gradual improvement, based on a sustained, but probably uneven, economic recovery, which may result from government stimulus efforts and a rebound in consumer activity, boosted by pent-up demand.
The various lockdown efforts have resulted in consumers having fewer places to spend their money and, in combination with considerable government aid, have led to an extraordinarily high personal savings rate. And corporate earnings should further be bolstered by low interest rates and businesses’ cost-cutting efforts.
Vaccine progress: The worldwide drive toward finding a vaccine to treat the coronavirus is truly unprecedented. Several companies, working in concert with the government or academic institutions, are reporting encouraging results in early stage trials, and top infectious disease experts now say an effective vaccine may be ready in early 2021. Such a development would boost consumer confidence and allow economic activity to return to pre-pandemic levels.
Federal Reserve actions: The Fed has made clear it will do everything in its power to support an economic recovery. Chief among its actions are moves to keep interest rates near zero for an extended time period and to continue buying bonds.

Keeping interest rates and credit costs low for the foreseeable future will help reduce some of the market’s “downside” risk that would have been more pronounced without the Fed’s backstop.
Despite the possible causes for confidence described above, there are still no assurances that the financial markets will continue their upward trend. The biggest reason for uncertainty, of course, is Covid-19 itself. If more spikes lead to complete or even partial lockdowns, and schools go through chaotic re-openings, the resulting economic slowdown could cause investors to take a pause, leading to downward pressure on the markets.
In fact, there’s fairly widespread agreement that, until we get control of the virus, either with a vaccine or through rigorous observance of social distancing, mask-wearing and other measures, the economy will not really be on firm ground.  It shouldn’t be surprising if economic and earnings data display a mixture of encouraging signs and periodic setbacks, possibly leading to market volatility.
The financial markets, following an initial coronavirus-induced decline, have rallied strongly for several months, envisioning an improving economy, a government stimulus package and the ultimate arrival of a vaccine. Yet, great uncertainty remains over our near-term ability to contain the virus and the potential economic fallout from new lock-downs and school openings.
So, what should investors do?

Consider these suggestions:
Maintain realistic expectations. We’ve seen some impressive gains in the market recently, but this almost continuous march upward was never going to last indefinitely. It’s far more likely that we’ll see considerable market volatility over the next several months, so be prepared.
Rebalance when necessary. You may want to think about re-balancing your investment portfolio. For example, during the recent market run-up, your holdings might have become over-weighted in some categories, such as technology. The largest five stocks, by market capitalization, in the S&P 500 (Microsoft, Apple, Amazon, Facebook and Google) have driven much of the gains in the index, and, in fact, now account for almost one-quarter of its value.
Your individual circumstances – goals, risk tolerance and time horizon – should dictate your investment choices, but, as a general rule, you don’t want to be too heavily committed to any particular stock, sector or asset class.
Diversify – and look for quality. For the equities portion of your portfolio, look for domestic and international companies with diverse, reliable business mixes and strong financial positions. These investments can help put your portfolio in better position to withstand increased market volatility in the short term, while giving you more opportunities to benefit from a longer-term recovery.

Spencer Platt | Getty Images News | Getty Images

These are challenging times. The key is to have some patience. As an investor with long-term goals, you might have experienced the initial market plunge, and then the subsequent rally, with various sentiments: shock, disbelief, elation and doubt.
However, if you maintain a long-term perspective and have the patience and discipline to weather short-term disruptions, as painful as they may be, you can go a long way toward taking the emotions out of your investment decisions.
Ultimately, what we’re going through now with the pandemic puts the economy and the investment environment in uncharted waters. And we may be in for a long climb back before things return to normal.
But keep in mind that the U.S. economic engine remains powerful, flexible – and resilient. If you follow a strategy that’s appropriate for your needs and risk tolerance, and you adjust your portfolio as necessary, you can keep making progress toward all your important goals.    More

Paramedics lower a patient from an ambulance outside the emergency department of the Royal London Hospital in London, England, on January 26, 2021.David Cliff | NurPhoto | Getty ImagesMost regions of the globe are seeing an increase in new Covid-19 cases as highly contagious variants continue to spread, the World Health Organization said Monday.New cases worldwide increased by 8% over the last week, the fifth week in a row that the WHO has seen an increase in transmission, Maria Van Kerkhove, the agency’s technical lead for Covid-19, told reporters during a press briefing.Cases in Europe, where the highly contagious B.1.1.7 variant is rapidly spreading, increased by 12%, Van Kerkhove said. The WHO has also seen a 49% increase in cases in the Southeast Asia region, an 8% increase in the Eastern Mediterranean region and a 29% increase in the Western Pacific region, driven by an increase in infections in the Philippines and Papua New Guinea, she said.The Americas and Africa saw a “slight decline,” Van Kerkhove said, but she said the case numbers overall are “worrying.””There is pressure to open up in many of these countries, and there are difficulties in people and individuals and communities to comply with proven control measures,” she said, adding that there has been a “slight increase” in deaths across the world. “We’re also seeing that vaccination distribution is uneven and inequitable.”The WHO’s comments come as public health officials across the world grow concerned that reopening too quickly amid a rise of new, highly contagious variants could reverse progress in the global pandemic. Some countries, including the United States, have seen an increase in new Covid-19 cases even as they vaccinate millions of their citizens each day.Roughly 82.7 million Americans have received at least one dose of a Covid-19 vaccine and more than 44.9 million are fully vaccinated, according to data compiled by the Centers for Disease Control and Prevention.Still, the seven-day average of new cases rose by 5% or more in 27 states as of Sunday, according to a CNBC analysis of data compiled by Johns Hopkins University. The nation logged an average of 54,308 new cases per day over the past week — a 1% rise from the prior week after months of rapidly declining case numbers, according to the Hopkins data.Earlier Monday, New Jersey Gov. Phil Murphy said the state would likely pause its reopening plans as Covid-19 cases begin to rise again there.Also Monday, CDC Director Dr. Rochelle Walensky urged all Americans to remain “vigilant” as officials race to get the majority of Americans vaccinated.”We are at a critical point in this pandemic,” Walensky said during a White House news briefing. “I’m worried that if we don’t take the right actions now we will have another avoidable surge just as we are seeing in Europe right now.”Van Kerkhove urged the public to continue to practice safety measures, including social distancing, wearing masks, washing hands and avoiding crowded spaces. She also urged world leaders to prioritize vaccinating individuals most at risk.”There is still far more we can do at an individual level, at a community level, as leaders in government,” she said. More

U.S. President Donald Trump speaks during a Coronavirus Task Force news conference at the White House in Washington, D.C., U.S., on Friday, April 10, 2020. Kevin Dietsch | Bloomberg | Getty Images President Donald Trump said on Friday that he will not reopen the economy “until we know this country is going to be healthy.” The […] More

A Moderna (COVID-19) vaccine is seen at the LA Mission homeless shelter on Skid Row, in Los Angeles, California, U.S., February 10, 2021.
Lucy Nicholson | Reuters

Moderna said Thursday it expects to generate $18.4 billion in sales from its Covid-19 vaccine this year.
In releasing its fourth-quarter earnings, Moderna also said its chief medical officer, Tal Zaks, will leave the company in late September. The company said it has retained Russell Reynolds “to recruit for a new CMO with global and commercial experience.”

Shares of Moderna were up 3.9% in premarket trading.
The news comes a day after the company said it was expecting to produce at least 700 million Covid vaccine doses this year. It also said it expects to produce up to 1.4 billion Covid vaccine doses in 2022.
Pfizer, which also has a vaccine authorized for use in the United States, said earlier this month that it expected to sell about $15 billion in doses this year.
Moderna has a deal with the federal government for 300 million doses and has shipped about 55 million doses to the U.S. It expects to complete delivery of the first 100 million doses to the U.S. by the end of the first quarter, the second 100 million doses by the end of May and the third by August.
Moderna, like other vaccine makers, has been rapidly working to meet the demand for shots that hopefully will help bring an end to the pandemic, which has infected more than 112 million people and killed at least 2.4 million, according to data compiled by Johns Hopkins University.

The company is in talks with the Food and Drug Administration on a proposal to fill its Covid vaccine vials with up to five additional doses to ease a bottleneck in manufacturing. One vial of Moderna’s two-shot vaccine contains 10 doses, enough to inoculate five people, according to the Centers for Disease Control and Prevention.
The company also said Thursday it is in talks with the World Health Organization-backed COVAX initiative to supply doses this year and in 2022.
Moderna’s vaccine has been authorized by the FDA for use in people who are age 18 and older. Clinical trial studies are incomplete for children, whose immune systems can respond differently than adults.
The company said Thursday it has completed enrollment of 3,000 participants in a clinical trial testing its vaccine in kids ages 12 to 17. More

Investigators probing the fatal movie set shooting by Alec Baldwin believe they have found the lead projectile that caused the death of cinematographer Halyna Hutchins.
The lead projectile was recovered from the shoulder of director Joel Souza.
Santa Fe County Sheriff Adan Mendoza said while Hollywood has a history of following safety procedures when it comes to on-set firearms and prop weapons, there seems to have been “complacency” on the set of “Rust.”
Investigators are still collecting evidence and the district attorney is not yet ready to determine if charges should be brought in the case. However, criminal charges are not off the table.

Investigators probing the fatal movie set shooting by Alec Baldwin said Wednesday that they believe they have found the lead projectile that caused the death of cinematographer Halyna Hutchins.
Authorities said the object was recovered from the shoulder of director Joel Souza, who was injured during the incident Thursday on the New Mexico set of the Western film “Rust.”

The investigation has also turned up the gun and spent casing that is believed to have been used in the accidental shooting, said Santa Fe County Sheriff Adan Mendoza during a joint news conference Wednesday with New Mexico First Judicial District Attorney Mary Carmack-Altwies.
Mendoza said 500 rounds were located on the set, which were a mix of blank ammunition, dummy rounds and, possibly, live rounds. Mendoza declined to comment on how live rounds may have gotten on the set. Evidence collected will be submitted to the Federal Bureau of Investigation crime lab in Quantico, Virginia, for analysis, he said.
Other items collected from the set included clothing, accessories and three firearms. One is a long Colt revolver, which authorities believe is what was used in the shooting. The others were a single-action revolver that may have been modified and a plastic prop gun that was described as a revolver.
Mendoza said investigators are still collecting evidence and are not yet ready to determine if charges should be brought in the case.
“We are not at that juncture yet,” said Carmack-Altwies about the possibility of bringing charges against any members of the “Rust” crew. However, criminal charges are not off the table, she told The New York Times on Tuesday.

“If the facts in evidence and law support charges, then I will initiate prosecution at that time. I’m a prosecutor that was elected in part because I do not make rash decisions and I do not rush to judgment,” she said.
Mendoza said that while the film industry has a history of following safety procedures when it comes to on-set firearms and prop weapons, there seems to have been “complacency” on the set of “Rust.”
“The people that inspected or handled the firearm when it was loaded before it got to Mr. Baldwin — we’re interviewing. And there [are] some follow-up questions that we need to do,” Mendoza said.
Representatives for Baldwin and Souza declined to comment to NBC News.
This update comes just a day after the producers of “Rust” hired a high-profile law firm to interview cast and crew about the accidental on-set shooting.
Court documents released Friday show Baldwin was handed a loaded weapon by Dave Halls, an assistant director. Halls had retrieved the gun from a cart, where it had been placed by the armorer, Hannah Gutierrez Reed. Halls indicated it was safe to use moments before Baldwin fatally shot Hutchins and wounded Souza.
A search warrant filed in a Santa Fe court shows that the assistant director did not know the prop gun was loaded with live rounds.
Halls had previously been fired from the set of “Freedom’s Path” in 2019 after a crew member incurred a minor and temporary injury when a gun unexpectedly discharged, a producer on the project told NBC News.
There were also reports that the gun that killed Hutchins was used by crew members for live-ammunition target practice. The Wrap was the first to report this detail.
Additionally, a person familiar with the matter told NBC News that half a dozen camera crew workers walked off the “Rust” set in protest of working conditions just hours before the shooting took place. Among their concerns were multiple accidental discharges of the prop gun.

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