Why is the stock market rallying when the Economy is so bad?

Why is the stock market rallying when the Economy is so bad?by Gunjan Banerji | May 8, 2020Summary: Despite a large increase in the unemployment rate for April and plummeting consumer spending, U.S. stock prices have risen. Stock market analysts and traders are looking past dismal economic data and expect a speedy recovery when states begin to open their economies and progress is made towards the development of a Covid-19 vaccine.Application: Changes in stock market prices reflect traders’ collective expectations of future economic performance. The stock market is very competitive. Each share of a company’s stock is indistinguishable from any other share and there are many buyers and sellers of corporate stocks.Questions:-Changes in stock prices as measured by the Dow Jones Industrial Average, the Nasdaq Composite and other price indexes are considered to be leading economic indicators. What is a leading economic indicator?-Why are changes in stock market prices considered to be leading economic indicators?In perfectly competitive markets buyers and sellers are price takers. What is a price taker? Are buyers and sellers of corporate stocks price takers?-In a perfectly competitive market, firms produce and sell a standardized, or homogeneous product. Are corporate stocks standardized products? Explain briefly.-From the article: “…as has often been the case in recent years, investors find themselves faced with few attractive alternatives if they opt out of betting on stocks. The problem… has its own acronym: TINA, or There Is No Alternative to stocks.” Why would investors not find bonds attractive alternatives to stocks? Briefly explain the difference between a Treasury bond and a corporate bond.