US stocks closed with moderate gains after a rollercoaster week. However, the Covid-19 coronavirus has continued to hammer investor confidence, and Bank of America smells a recession.
The Dow Jones gained 0.96 percent on Thursday, closing at just over 20,000 points. The NASDAQ Composite closed up 2.3 percent, while the S&P 500 finished up 0.47 percent.

These gains, however, could partly be driven by speculation. According to regulatory filings, billionaire investors like Warren Buffet and Carlos Slim have all spent hundreds of millions of dollars snapping up cheap stocks lately, a move that could have inspired optimism in smaller investors. Likewise, the uptick could represent the market correcting itself, as the finite duration of the coronavirus pandemic becomes apparent.

“Financial markets, in particular stock exchanges, tend to view uncertainty more negatively than bad news. For that reason, they almost always overestimate the impact of bad news and correct that overshot as the facts surrounding a situation become clearer,” Peter C. Earle, research fellow at the American Institute for Economic Research, previously told RT.

Though few in government will publicly use the dreaded ‘R’ word just yet, Bank of America chief economist, Michelle Meyer, circulated a note to her clients earlier on Thursday “declaring that the economy has fallen into a recession,” CNBC reported.

“Jobs will be lost, wealth will be destroyed and confidence depressed,” the letter continued, with Meyer adding that she expects the US economy to contract by 12 percent in the second quarter of the year, and the unemployment rate to nearly double.

Meyer called on the government to throw Wall Street more money to avert the coming disaster. “There should be no upper bound for the size of the stimulus,” she wrote.

However, none of the array of measures promised by the Trump administration in recent days have managed to halt the stock market’s tailspin. Washington’s trillion-dollar stimulus announcement earlier this week did nothing to stave off the drop, and the market gains of the Trump presidency were officially wiped out on Wednesday when the Dow closed below 20,000 for the first time since January 2017.

Only after the Federal Reserve opened up liquidity lines with other central banks on Thursday did markets respond positively.

Those positive results came after a week of day-to-day swings. Promises of government assistance and a series of decisive speeches by President Trump triggered momentary rallies on Wall Street, but overall, the trend pointed down.