Why are stocks soaring as the economy melts down? Thank the Fed.

Pablo Martinez Monsivais/AP

• The stock market climbed for a second straight week, ignoring gloomy economic forecasts and bleak data as traders find a silver lining in the Federal Reserve.
• In recent weeks, the Fed has used both old and new programs to ensure credit flows where it's needed, signaling to investors that the public health crisis won't necessarily translate into a financial-market collapse.
• While the central bank's spate of relief efforts haven't directly lifted stocks, the policies "definitely had ripple effects into the equity market, no question about that," said Liz Ann Sonders, chief investment strategist at Charles Schwab.
• The Fed's policies "precluded the prospect of a complete economic collapse," leading traders to revive their risk-on views, Goldman Sachs analysts said in a recent note.
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The stock market seems unshaken as signs of a deep coronavirus recession pile higher and higher. As quickly as the S&P 500 spun out of its 11-year bull run, it's soared out of bear-market territory and surged 29% in just over three weeks.

This recent divergence between stocks and the economy has been jarring. How is the market so nonplussed by the mounting recessionary wreckage? Look no further than the Federal Reserve.See the rest of the story at Business Insider

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