4 Charts showing the Epic divergence between Markets & the Economy

U.S stocks have staged one of the quickest rebounds in history from the bear market despite weak fundamentals

There are two distinct narratives in the market when it comes to economic recovery from the current pandemic. Proponents of the V-shaped recovery are elated at the bounce of the markets from the lockdown-driven crash, earlier in March. While analysts on the other side of the spectrum believe the market has risen too far too fast, with the underlying economic fundamentals not advocating such a move.

The bullish sentiment suddenly came to grinding halt on Thursday, after the Federal Reserve announced its projections, saying U.S. economy is expected to shrink by 6.5% this year, the most in recorded history, before bouncing back to 5% in 2021 and 3.5% in 2022. News of escalation of new coronavirus cases in various U.S states coupled with these grim projections was enough to rattle the markets. The volatility also spiked.

Although the markets have somewhat stabilized since a massive drop of almost 6% in the benchmark S&P 500 index with gains in the following two trading days, the recovery still seems fragile. The numbers out of China today didn’t inspire much confidence either — The National Bureau of…