The stock market is one of the most important aspects of economics and is heavily politicized, in today’s society. Countries like Canada heavily rely on the United States success, in order to financially progress. This is very dangerous when issues arise and the market crashes. In March, companies were forced to shut down due to COVID-19. During March, the stock market had one of the work crashes in history with the Dow Jones Industrial Average (DJIA) plunging 6,400 points. The crash was the largest crash since 1929 and led to an unemployment rate reaching over 20%. Since news broke of the Pfizer Vaccine and its 95% success rate, investors have been excited and can be translated to the growth in the market with a dow increase of 1,300 points. There is still a risk but investors believe that the chance of living a post-pandemic world in a short time can lead to an economic recovery. With a potential vaccine on the way and a new President on the horizon, there is much hope for investors from a financial perspective. If President-Elect Biden’s plan is similar to former President Barack Obama’s, then there is no surprise that investors will be happy. From the time Obama took office to his last day, the DJIA increased by nearly 40%. In 1929, Wall Street crash was the largest in history and was a cause of the soon to be Great Depression. The unemployment rate increased by 30% and the market crashed. They were slowly able to rebuild from the Depression, due to reliance on Government purchases and trade. Unfortunately, the entire world is facing the effects of this crash which will make the rebuild progress at a slower rate. Assuming that a COVID-19 vaccine is coming soon and a new president is on the way, the stock market will be able to rebuild on its own but at a slower rate. Sources
https://www.sciencedirect.com/science/article/pii/S1544612320306668#:~:text=Introduction,an%20equivalent%20of%20roughly%2026%25. https://www.cnbc.com/2020/11/09/vaccine-news-unleashes-new-momentum-in-stock-market-as-hunkered-down-investors-flee-cash.html