The Epic Stock Rally Is Complete
We’re back to square one again. The S&P 500 just broke even for the year, ending yesterday’s session up slightly to cap off a ‘v’-shaped recovery from coronavirus lows. It’s like nothing ever happened!
If you held through the carnage and didn’t panics sell, congratulations, you technically achieved nothing. Of course, though, anyone who stood firm over the past two months has won the respect of the Invstr community and with any buying has made real money. We can’t name a single stock down on the S&P 500 over the last ten weeks!
“The words that come to mind are epic, monumental,” said portfolio manager David Sowerby at Ancora Advisors. “I don’t think even the most optimistic bull could have anticipated this.” The most pessimistic bear, who is Superinvestor Stan Druckenmiller, only made 3% amid the 40% rally as he retreated to cash and short positions.
It’s unnerving for long-timers like him to see fundamentals go out the window. The market is fast-tracking stocks to their pre-corona highs, validation for those who believed that a market crash was wrong in the first place. However, no one likes to feel out of control, nor that we’re turning a blind eye to lasting lockdown damage.
There’s debt out there that will take years to whittle down, and it will divert investments in growth. There are digitally printed greenbacks everywhere, and foreign exchange traders are soon to outflow from the safety of the dollar for riskier currencies. The risk of a second wave has also never been greater as we return to the outdoors protesting.
The good news is that we’re finally seeing jobs come back; over two million were added in the US last week. It seems most people are hoping to revert to their old ways of life, too, and it’s always tough working out if markets are calibrated properly when trillions in stimulus are being pumped in. What are your predictions for 2H20?
