NEW YORK (Reuters) – A bounce in stocks is likely to face a test in the coming weeks as investors try to gauge whether countries and U.S. states emerging from lockdowns can arrest a sharp fall in economic growth without provoking a resurgence of coronavirus cases.
FILE PHOTO: The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, U.S., April 26, 2020. REUTERS/Jeenah Moon
The S&P 500 .SPX has rallied about 30% off its March lows, fueled by monetary and fiscal policy designed to stimulate the economy after the United States ordered country-wide lockdowns to stop the spread of the novel coronavirus, which has surpassed 1 million cases in the United States.
With some optimism that the virus is peaking, 22 states, accounting for 38% of gross domestic product, may be open within the next 10 days, according to a tally by Fundstrat.
“If you see a number of cases for a particular state that has opened up early starting to increase… that is going to be a worrisome sign,” said Robert Pavlik, chief investment strategist at SlateStone Wealth. “Because then this progress that we have made starts to get halted and… the market becomes more nervous th