Around 26,000 is the DJIA at the 23 of this month. It has been around this level for weeks. This does not make this valuation less ridiculous. We were in ever increasing bubble territory last in 2019 already. Then came the biggest economic event since 1945. The world overall will be changed more by Covid-19, than it even did on average when the Soviet seized existing.
And yet: “the market” makes up a “V shaped” narration. Hertz, being bankrupt, and therefor worthless, contemplated in earnest to sell a billion dollars worth of its shares. It got approved to do so. But somehow came to its senses and ended up not doing so. It would have been the equivalent of selling a burning house.
Somehow trades think that with a vaccine everything will just snap back to normal. And they probably think that a vaccine is as easy as them entering a trade on their keyboard. It is not. Coronaviruses got discovered more than 50 years ago. They make up about a third of the common. Vaccines we have developed against them: exactly zero. Covid-19 is luckily rather stable. I am personally hopeful that we will have candidates and some that will work. But it takes time to develop, test, produce and then distribute them. A vaccine will probably not make an impact this year. So this year all we can do is to social distance. Different countries can apparently do so at varying degrees. Social distancing has commercial impact. Not only for opera chorus singers. For everybody. The stock market is supposed to be about the future. Right now it certainly is not.
It is not impossible that the shape of the recovery will be “L shaped” – Pretending as if nothing happened and money printing of the feds will just magically fix everything makes no sense. At all.