This is John Persinos, editorial director of Investing Daily, with a video update for Monday, August 3.

Investors are understandably confused. Stocks have been rising, amid bearish economic conditions. The rally seems to defy logic.

With apologies to Charles Dickens, we’re witnessing a Tale of Two Economies. It’s the best of times and it’s the worst of times.

Can the financial markets stay aloft in this bifurcated world? I wouldn’t bet on it. Dismal economic data will eventually catch up with sky-high valuations. Below, I’ll steer you toward a trading system that reliably makes money even under these perilous conditions. But first, let’s take a look at last week, with an eye on what to expect ahead.

U.S. gross domestic product growth (GDP) data showed its worst quarterly downturn on record. Initial jobless claims rose. Congressional negotiations over a new coronavirus relief bill stalled.

And yet, Wall Street shrugged it all off. Stocks finished the week mostly higher on better-than-expected earnings news. Stellar second-quarter operating results from Big Tech companies added impetus to the rally, pushing the NASDAQ composite ever higher. The S&P 500 rose as well, although the Dow Jones Industrial Average took a slight dip (see table).

However, there’s an undercurrent of nervousness on Wall Street. Millions of Americans face financial deprivation and eviction from their homes. Fiscal relief from Washington is bottled up amid acrimonious deliberations. Doubts last week about the economy helped push the 10-year yield to its third-lowest closing level on record and the five-year yield to a new record low.

The U.S. Commerce Department reported Thursday that U.S. GDP plunged by 32.9% in the second quarter on an annualized basis, the worst quarterly decline in American history (see chart).

For laid-off or furloughed workers who somehow navigated an overwhelmed jobless-claims system, extended unemployment benefits that were included in the CARES Act alleviated the financial pain. But those benefits expired on July 31. An estimated 30% of Americans (on average) are missing their monthly housing payments and risk eviction.

Most industries have gotten clobbered by the coronavirus pandemic. The travel and hospitality industries are decimated. The oil and gas sector struggles with severely reduced energy demand. However, the globe’s technology behemoths are weathering the pandemic. Indeed they’re thriving.

Alphabet (NSDQ: GOOGL), Amazon (NSDQ: AMZN), Apple (NSDQ: AAPL), Facebook (NSDQ: FB), and Microsoft (NSDQ: MSFT) all posted double-digit year-over-year revenue growth for the first six months of 2020 ending June 30. The following chart tells the story:

These five tech companies reaped a combined $33.9 billion in profit in the second quarter alone. The tech sector is benefiting from the pandemic as quarantined consumers shop, work, learn, play, and socialize at home.

The dual economy…

Other industries aren’t sharing technology’s good fortune. Consider the four major U.S.-based airlines. Each airline saw operating revenues drop by more than 80% in the second quarter.

Read This Story: Airlines Signal Worse Economic Times Ahead

Boeing (NYSE: BA) CEO Dave Calhoun recently said he expects a major airline to go out of business this year as the pandemic crushes demand for passenger flights.

Boeing is the largest maker of commercial and military aircraft in the world and as such, it’s a symbol of American industrial might. Last week, the storied plane maker reported a second-quarter loss of $2.4 billion as revenue plunged because of plant shutdowns and disappearing aircraft orders.

Boeing’s Q2 per-share loss was $4.20. On an adjusted basis, the per-share loss was $4.79, worse than consensus expectations of $2.54. Revenue for the quarter plunged 25% from a year earlier to $11.8 billion.

Boeing’s woes are mirrored in the weak Q2 operating results of a slew of blue-chip industrial bellwethers.

Watch This Video: Just How Bad Are Q2 Earnings So Far?

Meanwhile, the NASDAQ 100 is trading at its highest level since 2004. A snapshot of the NASDAQ 100 reveals that nearly half of the entire market cap for the index is made up of six tech giants: Alphabet, Amazon, Apple, Facebook, Microsoft, and Tesla (NSDQ: TSLA). The NASDAQ 100 is trading at nearly 27 times next year’s earnings.

The most likely trigger for a stock market correction will be biological, not financial. Investors who think the pandemic will somehow wane in the coming weeks are sticking their heads in the sand. The following map paints a grim picture.

According to Johns Hopkins, about 1,400 Americans died from the coronavirus last Thursday, the most in a single day since May 15. On that single day, there were twice as many COVID-19 deaths in the state of Texas alone than in the five major countries of Western Europe combined.

States are reimposing lockdowns. Millions of Americans are still too afraid to resume normal commerce. It doesn’t take a PhD to figure it out: mass death is bad for the economy.

A trading system for troubled times…

The technocratic elite of Silicon Valley is reaping a windfall but many other industries are on life support. Small businesses are going bankrupt in droves. Investors have to wonder: is this disparity sustainable? Probably not.

The only way for the economy to stabilize and return to broad-based growth is for governments to get the pandemic under control. Until the virus recedes, you should shy away from “risk on” assets.

But in the meantime, you don’t have to sit on the sidelines. My colleague Jim Fink has devised a trading system that makes money regardless of economic ups and downs, with reduced risk.

Jim Fink is the chief investment strategist of our premium trading service Velocity Trader. Jim has developed a scientific way to quickly and predictably multiply the gains of regular stocks. He created this system after years of painstaking research and trial and error.

Called the Velocity Profit Multiplier (VPM), Jim’s proprietary investing method allows you to jump into trades with complete confidence because you know that when share prices move in the right direction, VPM will juice up your returns by 100%, 300%, even 800%…every time…in less than a month. Without fail. Even better, his scientific system turns around these profitable trades in 60 days or less.

VPM is generating market-beating gains for its adherents, despite the pandemic-caused recession. Want to generate wealth, the Jim Fink way? Click here for details.

Questions or comments? Drop us a line: mailbag@investingdaily.com