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Billings broker praises Fed as Wall Street surges

Posted at 7:55 PM, Jul 15, 2020
and last updated 2020-07-15 21:55:37-04

Have you checked your 401K balance lately? You may be nervous after the big drop we saw when the pandemic started, but stocks have somehow managed to make quite a comeback, despite economic hardships and fears about what might lie ahead.

There was a lot to cheer about on Wall Street as the Dow Jones Industrial average surged 557 points Tuesday to close at 26,642.

“We had a big day in the stock market. Things are coming back and they are coming back very rapidly—a lot sooner than people thought,” said President Trump during an afternoon news conference in the Rose Garden.

The Dow is still down about 10 percent from its high for the year, but it has gained back nearly 8,500 points since March 23, when it spiraled to its low over fears of the growing pandemic.

Gary Buchanan of Buchanan Capital in Billings says the rise has been surprising.

“The Federal Reserve has really helped. They have stepped up in ways beyond 2008 and 2009 and so we have come back and any time we have any good news and there’s some more today after the market on vaccines,” said Buchanan.

That encouraging news Tuesday came from the phase one trial of an experimental vaccine by Moderna that showed it was safe and provoked immune responses in all of the volunteers who took part.

Tech stocks that help people work from home have also zoomed during the pandemic.

Still there’s a big difference in what is happening on Wall Street and Main Street. Unemployment is in double digits. Many businesses may close their doors for good. And some states are now having to go back to restrictions as more people contract the virus.

“The market is way ahead of the economy. The economy is in not as good of shape as the market and the question is, will the market start to reflect more of the realities? I expect a lot more volatility. I would definitely, if you are an investor, keep your seat belt on,” said Buchanan.