The price of Facebook (NASDAQ: FB) and Amazon (NASDAQ: AMZN) stock hit a new all-time high amid the coronavirus pandemic, as the stock market has been outperforming the economy.
According to available data, Facebook stock is now trading above $230 marking a new all-time high for the social media giant. Its positive performance comes shortly after it launched Facebook Shops, a platform that makes it easier for small businesses to sell to its billions of users amid the coronavirus crisis.
Speaking to CNBC Todd Gordon, managing director at Ascent Wealth Partners, said FB stock has been having a “very impressive” performance, noting that Facebook’s move up is “pretty spectacular.”
Facebook Shops gives the social media giant a new source of revenue, at a time in which advertisers are spending less because of the crisis. It comes as the deadline to launch the Libra cryptocurrency project approaches.
Amazon has been managing to outperform Facebook, however, as the e-commerce giant recently hit a new all-time high close to the $2,500 mark. AMZN stock dipped shortly after hitting it but has since recovered, and ahead of the opening bell is at $2,451.
The e-commerce giant’s performance comes after it reported gains in the first quarter of the year amid the coronavirus outbreak, as demand went up. It further announced it will be using all of its second-quarter earnings, of around $4 billion, in response to the crisis.
Stock Market Outperforms Economy
Other blue-chip stocks have been performing rather well, despite the toll the pandemic has taken on the global economy. According to Yahoo Finance, data from April included dismal jobs numbers and poor retail numbers, which led economists to lower their economic growth forecasts.
This month Goldman Sachs cut its GDP forecasts and warned the unemployment rate in the United States will reach 25%, while Credit Suisse economists warned a “longer growth slump will outlast fiscal relief.”
Economists from Bank of America said that the recession will be “unlike anything we have seen in modern history,” after claiming GDP in the second quarter of the year would fall at a 40% rate. Large firms in the S&P 500 index have, however, posted better results than expected.
Credit Suisse’s Jonathan Golub was quoted as saying:
- Although aggregate earnings are beating estimates by +2.6%, ex-Financials, earnings are surpassing expectations by +7.1%, with 65% of companies exceeding their lowered projections.
These better than-expected-results help, according to some analysts, explain the rise in the stock markets.