Markets and the economy: Two staggering drunks

Why are stock markets so buoyant as the global economy slides into a possible coronavirus-induced depression? Some 33 million Americans have lost their jobs in the past two months of the pandemic, yet the Nasdaq market is now higher than it was at the start of the year. The financial markets and the economy have been described as two staggering drunks tied together by a rope. Manuela Saragosa explores this odd analogy and how it applies to the current disconnect between share prices and jobless claims, with the help of Jane Foley, financial strategist at Rabobank. Meanwhile emerging markets are experiencing unprecedented financial outflows that risk undermining their ability to limit the damage Covid-19 does to their economies, according to Martin Castellano of the Institute of International Finance. Yet in the US, the Federal Reserve had no problem staving off financial calamity by promising to do whatever it takes, says Fed economist Julian Kozlowski. (Photo: Drunken couple. Credit: Getty Images)