PEORIA, Ill. (WMBD) — Stocks on Thursday closed slightly higher than expected.
The DOW up close to 12 points, to 26,281.
Other stocks, while slightly down, still performed better than expected.
An economic expert from Bradley University tells WMBD the fact stocks are beginning to increase in price is due to the thought that big businesses will improve in the next few months.
But Colin Corbett says this isn’t a mirror how well the overall economy is doing.
“One sort of morbid reason stocks have been doing well, is because big companies are doing well, but small companies are not and so when this whole thing passes, many of the big companies will be left with less competition,” Corbett said.
Corbett says because stocks are improving, investors believe the market will recover.
He adds stock prices tanked so much in March partially because no one know how long the pandemic would last and how bad the virus would impact companies.
“In many ways, the profits that companies make are not connected to how well everyday people are in their jobs. So obviously we’ve seen a huge increase in the unemployment rate, so obviously that hurts businesses in terms of reduced demand for their products. But at the same time, a higher unemployment rate means that businesses have an easier time hiring quality candidates for lower wages,” Corbett said.
Corbett says because of the stimulus and recovery bills we’ve seen, the Federal Reserve stepping in, and containing the virus’ transmission rate has helped the economy during the pandemic.