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Crashing Economy, Rising Stocks: What’s Going On? (NY Times, 4 min read) NYT columnist Paul Krugman believes there is no disconnect between the stock market and the economy. It is the lack of viable alternatives available to investors, primarily due to a weak economy, that has driven stocks higher.
Why Value Died (A Wealth of Common Sense, 5 min read) Japanese and European stocks have performed poorly not because of low rates but because they are weighted towards value stocks, and value stocks underperform when inflation is low (and vice versa). US stocks have overperformed in a low interest rate environment because they are geared towards growth.
Earnings Expectations in the COVID Crisis (MIT, 16-page read) Downward analyst revisions in earning growth can explain a large portion of the recent decrease in stock prices.