Why is the stock market rallying when the economy is so bad?

Many analysts are looking past the grim economic data, forecasting a speedy recovery as state economies open back up across the country.

New York, which has been the hardest hit by the pandemic, has begun developing a plan to restart its economy. Other states are farther ahead, with more than 20 allowing some businesses to reopen. Nevada’s Gov. Steve Sisolak said some businesses including dine-in areas of restaurants would be allowed to reopen Saturday with social distancing and occupancy limits. Those moves have encouraged investors that the economy is poised for a rapid rebound by early 2021.

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Additionally, the number of new Covid-19 cases has moderated in the U.S. And stocks have surged on any signs of progress toward a potential vaccine.

“People are making the bets….that this is the bottom,” said R.J. Grant, director of equity trading at KBW. Still, he said, “The market is really divorced from economic reality right now.”

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