June 21, 2021
The corona virus wreaked havoc on stock prices in February and March. After hitting a high of 3,380 in mid-February the market plunged by,1000 points or 32% in five weeks to a low of 2,304 in mid-March.
But then the government passed a $3.0 trillion of fiscal stimulus. The Fed added another $3.0 trillion of liquidity via their purchases of U.S. Treasury securities. As a result the stock market turned upwards and regained everything that it lost in just five months. In the 2008-09 recession it took 5 years to regain what it lost. It has been a dramatic run-up in stock prices. Since hitting that mid-March low, stock prices have climbed 67% and every few days achieve yet another record high level. Part of the most recent ascent was triggered by the prospect of another $1.9 trillion stimulus package on top of the initial $3.0 package in March and a second $900 billion package enacted in December.