STOCKS CLIMB AS US STREETS ARE LITTERED WITH BLOOD

A weekend filled with police brutality protests, looting, and civil unrest was largely ignored by investors as markets climbed higher on both Monday and Tuesday, wrote Ben Winck for Business Insider on June 2, 2020.

Risk assets have been largely detached from surrounding trends in recent weeks, continuing their rally even as economic data comes in below expectations, and as health experts caution against premature reopenings. "The stock market doesn't care about social justice," Jim Cramer, host of CNBC's "Mad Money," said Monday, adding "investors are simply trying to make money." All three major US indexes climbed unabated on Monday and into Tuesday.

The market is - and has always been - a forward indicator even when the streets are littered with blood. It most directly reflects investor expectations for corporate profit growth. So while the death of George Floyd and resulting protests caught traders off-guard, their lack of anxiety suggests they don't see the societal unrest as a direct threat to long-term company earnings.

The trend isn't new to 2020. When a similar combination of a pandemic and protests slammed the US in 1968, the S&P 500 reached a 10% total return by the end of the year. Current events and 1968 "share the 'disconnect' between the stock market and political turmoil, violence and general ugly mood of America," Tom Lee, head of research at Fundstrat Global Advisors, said.