The stock market is soaring despite mass social unrest and a pandemic
Bloomberg's Tracy Alloway noted Tuesday, the country saw "mass social unrest, continued culture wars, the prospect of martial law, a curfew in the world's biggest financial center, and the looting of a retail icon. So naturally, futures are up."
Between the lines: She didn't even mention that the number of new coronavirus cases worldwide is now rising at a record rate of more than 100,000 per day.
Why it matters: Sometimes, in the markets, bad news is good news. In this case, corporate America seems to be acting rather like one of those improbable Hollywood action heroes: No matter how large and how terrible the perils thrown in its way, the result never seems to be much more than a flesh wound.
By the numbers: The S&P 500's net profit margin was a robust 10.5% in the first quarter of 2020, despite a large part of the economy being shut down by the novel coronavirus.
- The S&P 500 is expected to earn $126 per share this year. That's more than it earned in any year up to and including 2016. Next year, FactSet estimates that the 500 companies will earn a record $162 per share.
The big picture: The real economy is terrible, with GDP plunging and unemployment reaching Depression-era levels. If corporate earnings can survive all this and a historic bout of social unrest, investors can be forgiven for thinking that they can probably survive anything.