Stock Market Up 26% since March 23


We know it's 4/20. Maybe that's why we've fielded much skepticism about +26% rise in the market since its low on March 23rd. Even considering the discounting, forward looking nature of the market talked about earlier, how can it move so meaningfully when the news is so bad? It's confusing, even if you don't partake in the 420 ritual.

It is important to keep in mind that the market is still almost -20% below its old February high, so we are far from signaling the “All Clear.” In addition, you have to balance the negative with the stimulus funds coming through. The economic hit is unprecedented, but so is the government action. Not only the $2k average checks sent out to most families in the entire country, but also the small business loans, enhanced unemployment, bond purchases, record low interest rates and now materially lower gas prices. In isolation these are enormous economic boosts even when spread over an entire year and most hit this quarter. None of these historically large interventions existed last month and there is talk about more to follow. The economic calculous was materially changed and that is likely responsible for much of the market rise.

Now that the stimulus is priced in, the $10 trillion question is WHEN will we be back to some semblance of normality. The emerging benchmark is whether children will be returning to school in September. What two weeks ago seemed a probability suddenly seems uncertain, which is not good news for this most recent rally.


Smoke that.

 scoop markets, written by professional economists and investors with backgrounds from leading Wall Street firms, breaks down the complexities of the stock market and economy into easy access, digestible morsels. You're busy, but you care about your investments - and it's exhausting keeping up with the stock market.  We solve that problem.  

SUBSCRIBE 

 Get the weekly email that makes keeping up with the market actually enjoyable. Stay informed and entertained, for free. 

If you don't like our newsletter, please unsubscribe at anytime. Seriously, no hard feelings.

© 2020 scoop markets. All Rights Reserved.