Bull Markets and Pandemics

On January 1, 2020 (before the pandemic), the opening price of the S&P 500 was 3,244.67. On June 30, 2021,
the closing price of the S&P 500 was 4,297.50, an increase of over 32%!
Discussion Board Requirements: What caused the S&P 500 to increase by 32% over an 18-month period even
though the economy was unexpectedly “locked down” during much of this time? Was the increase justified by
fundamental factors? If so, what were they? If the increase was not justified by fundamental factors, what
caused it? In either case, you should clearly state your opinion and you should support it with objective data or
reasoning. In addition, you should explain why this 18-month market movement either supports, refutes, or is
not inconsistent with the efficient markets hypothesis.

Sample Solution