Given the recent action in the stock market, it appears to be pricing in more of a “v” shape recovery. What could be driving this?
As more states in the U.S. and more countries around the world start to reopen it seems to be boosting the confidence of the stock market. In addition, there are also strong hopes of a vaccine breakthrough as we now have multiple companies performing human trials. All of this has resulted in the S&P 500 nearing and possibly exceeding its 200-day morning average, which is followed closely by technical analysis and a break above this level would be considered bullish.
Whether the stock market is right or overly optimistic… time will tell, but there is no denying that there is just so much going and so many questions that will be answer over the weeks and months ahead. A few being, as the world starts to reopen do we see a spike in covid-19 cases? If we do, what is the number or percentage that gets the market nervous? We are now starting to see bankruptcies and small businesses that are announcing that they are closed for good. So, how many of those over 38 million jobs lost do not come back? There is hope for a vaccine, but when does hope turn into reality? What we do know for sure is that it will certainly be an interesting couple of months.
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