The stock market is a leading indicator. Economic data (unemployment, manufacturing, GDP etc) are all lagging indicators. The terrible economic data (high unem

The stock market is a leading indicator. Economic data (unemployment, manufacturing, GDP etc) are all lagging indicators. The terrible economic data (high unemployment, low growth) already showed up in stock market returns in the first three weeks of March. What we have seen in April/May represents improving expectations for the economy in the future (as in, a few months to a few years... in theory the market discounts future earnings to infinity, but in practice it is not looking ahead more than 3-5 years most of the time, which is why it is so volatile).