The stock market has fully detached itself from the near-term economic realities in the U.S. stemming from the COVID-pandemic. But perhaps the market should be paying more attention to the state of the economy to inform its investing decisions, especially as valuations have climbed considerably from the late-March lows.

“We are not expecting the U.S. to return to pre-crisis levels for two years. Markets seem to be a little bit more optimistic than we are, and I would say other economists are as well,” warned veteran S&P Global chief U.S. economist Beth Ann Bovino on Yahoo Finance’s The First Trade.

Another 2.4 million workers filed for jobless benefits last week, according to new data from the government on Thursday. That brings the total number of new claims to more than 38 million over the past nine weeks.

“The sharp rise in continuing claims the week before illustrates that the easing of lockdowns in many states has not yet resulted in any large-scale recall to work for those currently on temporary layoff,” pointed out Capital Economics chief North American economist Paul Ashworth.

FILE – In this March 17, 2020, file photo, people wait in line for help with unemployment benefits at the One-Stop Career Center in Las Vegas. The number of out-of-work people filing new claims for jobless benefits in Nevada is closing in on 390,000 since casinos and other businesses were shuttered to prevent spread of the coronavirus. The U.S. Department of Labor reported Thursday, April 30, 2020, that more than 45,000 people filed first-time claims for unemployment benefits last week. (AP Photo/John Locher, File)

Elsewhere, in a new survey out Thursday, the Philadelphia Fed manufacturing index for May showed the economy continuing to bump along the bottom.

The survey found that 58% of the firms polled saw a decrease in activity this month while a mere 15% reported an increase. Although the new orders component rose 45 points from April, it was still a negative 25.7% — suggesting the economy will remain under severe pressure in the months to come.

‘I am a bit more nervous’

Meantime, major corporations from Walmart to Target to Macy’s continue to warn about cautious unpredictable U.S. consumers. That has led them to refrain from providing financial guidance and plan businesses conservatively for the back half of 2020.

“We are seeing an improvement,” Coca-Cola Chairman and CEO James Quincey told Yahoo Finance in an interview, when asked about the current state of the beverage giant’s business. But Quincey quickly acknowledged he is staying cautious because of the volatile nature of the pandemic.

Even in the face of all these concerns, the stock market has plowed forward on what may be a demented logic of future economic activity. The Nasdaq Composite is just a couple hundred points away from its late February record high (and up 4% year-to-date), powered by strong inflows into big cap tech names Apple, Facebook, Amazon, Netflix and Alphabet. The Dow Jones Industrial Average and S&P 500 have each climbed about 5% inside of a month.

“I have to say I am a bit more nervous,” says Bovino on the economy. “So often I say when I’m nervous, maybe you should be, too.”

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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