The Market’s Hottest Sesh in Months!
The stock market will be first to benefit from a coronavirus vaccine whenever or wherever it appears first. The market may even experience a bullish placebo effect before a vaccine is announced. If there’s a belief in a coronavirus exit strategy, buy orders will fill, and worldwide indices will rise. We learned that yesterday, as a Moderna trial rallied stocks.
It was the best day for investors in six weeks; almost everything green. Superinvestors like David Einhorn made filings public that revealed their coronavirus trades, which included lots of airline selling, energy sector buying, and blue-chip holding, and if that wasn’t enough, the Federal Reserve also kept the good vibes going.
Fed Chair Jerome Powell used a rare television appearance to assert he was “not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs. We’ve already flooded the system with money.” It’s interesting to hear such honesty, but someone in the future always has to foot the bill!
The politicians behind mega stimulus bills will get their chance to grill Jerome Powell on that today during his testimony on Capitol Hill. The markets will trade his every word, buying on hints of more stimulus and selling on truth bombs about the depths of this downturn.
Investors may be taking profits before he speaks, or geeing up for the most aggressive stage in the bull run. We’re at an inflection point, either way!