Is the government propping up the stock market or something? WTF is going on?

[GusFring]

News that the economy contracted, unemployment sky high, Dow about to hit 25k. Something is not right.

[DrToast]

1. Do you think it was a surprise that the economy contracted?

[elleng]

2. 'Success' in drug trials (imo.)

[HarlanPepper]

9. Yes, I think that is the bet some are making

Of course if there are any problems developing a vaccine and drugs used to treat the virus itself we may see a massive cratering again IMO.

[uponit7771]

17. Remd was no game changer and the bed came out at manipulated time

[SWBTATTReg]

3. Bargain hunters, speculators, etc. Some of the dividend rates are getting pretty impressive,

so I'm sure some are rebalancing their portfolios.

[aquamarina]

4. The economy is not the stock market

The stock market is not the economy.

Some stocks will do better in good economies some will do worse.

[earthside]

5. Gamblers.

Also brokers who earn commissions on trades.

The Fed isn't supposed to, but they might be buying.

The stock market has little connection to the economy ... obviously.

No, it isn't right and this kind of market activity just adds to the cynicism most American have about what is really going on.

[Loki Liesmith]

6. Cheap stocks

[orwell]

16. Most stocks are not cheap...

...they are still at pretty lofty valuations, especially with falling earnings.

[Loki Liesmith]

19. Then short them!

I’m inclined to agree but perceptions drive the market.

[MLAA]

7. I've come to believe

The stock market is manipulated and no longer has an association with true economic health (are non stock holders’ lives improving). It just makes no sense to me either.

[Doodley]

8. It's expectation things are going to get back to normal soon as states reopen. Ain't gonna happen.

[Mariana]

10. Yes. nt.

[Walleye]

11. Irrational exuberance

[Xolodno]

12. Very cheap stocks.

Many were waiting around to see when the market would hit bottom.

I dropped $1500 thinking it might go lower, but obviously I can't be sure of that. But I'm planning in being in it for awhile, so I pulled the trigger and bought. Its now around $1900.

I suspect it will drop again and it will be a roller coaster for the rest of the year. But I'm in no hurry. I'm planning on increasing my 401k contribution as well.

[Jspur]

13. It's all speculators combined

with bail out money that has allowed it to go up. Also the Fed has done some manipulation on it. Speculation is really what drives it. If you tell wall street there is a 1 percent chance this will be cured in a month than they will run with it and assume it's going to happen. To me that's bs but that's how they operate. They go with the best case scenario and not the most realistic scenario.

[kurtcagle]

14. Phase 2

This will go in three phases -
Phase I - the collapse of the markets to about 50% of their previous levels, in one of the most dramatic sell-offs in history. This has happened.
Phase II - bear market rally, which we're about halfway through. People buying up stocks that they think are now cheap, believing that we may be near the end of the infection and that things will return to normal with only minimal disruption. Likely also aided by the Fed's buying stock to pump it up. This phase will likely last until it June, when it becomes obvious that most places are not ready yet to open up, or the spike is coming with people breaking quarantine.
Phase III - long, drawn out, as reality hits about the state of the pandemic and secondary effects of the collapse kick in. This will see a deflation of the bubble down to below collapse levels, but may very well take months or even years to reach a point where the market hits bottom.

[uponit7771]

18. You think we go back to DOW 29k before end of June?

[ProfessorGAC]

20. I Don't

If you look at revenue growth, and profit growth of DJ, S&P, & Russell companies (even with the unwarranted tax breaks) those indices were over valued by 12-16%.
So, the virus tripped a correction, went too far due to panic profit taking on long term holdings, and is trying to seek an equilibrium.
I seriously doubt anything near 29+k, because the equities weren't worth that before.
Remember that a HUGE fraction of the C in GDP is from small, non-public businesses. They're likely getting hit much harder than the much larger, publicly traded companies that make up the indices. So, the GDP hit is impacting the markets less.
Since UE is way up, at some point everybody is going to take a hit. But, for now, stock buyers are looking at 2 or 3 years. Over that time frame, the can still see 17 - 25% return.
Don't know about day traders. That strikes me not so much as investing, but more gambling.
But, 29k or more seems a pipe dream.

[uponit7771]

30. Thx, You think we test 24 - 25 ish on S&P? If so how long? Mid May? tia

[ProfessorGAC]

33. The Dow Not S&P

25ish for DJIA, 2,800 for S&P, 1,300 for the Russell.
I'm guessing, not predicting. Seems about right for the 5 years prior to the pandemic.
Now, if this thing roars back with reopenings, we start over in guesses.

[kurtcagle]

40. No - I mean I think we've hit the peak of the rally

at around 24K. I don't think we're going to see DJIA 29K for a LOOOONG time.

[spin]

15. COVID-19 is serious but not the end of the world as we know it. ...

That seems to be the growing opinion today.

It may or may not be correct. Time will tell.

[Steelrolled]

27. I think this is it

Six weeks ago, or so, traders were not sure how big this really was. There was a lot of panic selling. As time goes on, there is less and less a fear of armageddon.

[Proud Liberal Dem]

31. I don't think that COVID-19 is going to be the end of the world

It's not exactly "Captain Trips" but it could have been handled so, so much better than it has and resulted in far less death and devastation.

[spin]

35. As usual we were not well prepared. ...

Of course you can’t be prepared for everything but the experts have been predicting that another 1918 type flu would emerge for years.

In passing I just finished re-reading Stephen King’s ‘The Stand’ which is a long but excellent book.

[Proud Liberal Dem]

36. I LOVE The Stand

It just rankles me that this could have been handled better, we could have been prepared more but weren't. And it wasn't because this exploded overnight and took everybody completely by surprise. And it also wasn't because there weren't mechanisms or ways to help prepare for this thing because Trump got rid of them because......Obama. And because Trump is clearly not fit to govern, never has been and never will be. It just pains me to think how much better Hillary Clinton would be handling things now AND how much the Republicans would be throwing s**t at her while she would be doing what needed to be done.

[spin]

37. There is still a possibility Hillary will run for president or VP this election. ...

I have this feeling she will but of course I could be wrong.

[Proud Liberal Dem]

38. I don't know about the President part

but I wouldn't be mad if she ran with Biden as VP. But TBH I think that Joe has to choose somebody younger to carry the torch in case he doesn't plan to serve 8 years or something happens to him.

[spin]

39. I see her as the VP candidate.(n/t)

[ananda]

21. It was the news regarding Gilead and their drug Remdesivir.

nt

[brokephibroke]

22. Unlimited QE, huge stimulus programs, zero interest rates

Investors are propping up the markets. Where else are you going to put your money for some kind of return? Stay long America and thrive....

[Steelrolled]

28. Yep, after 2009-2010 I heard so many sad stories

of people who dropped out of the market near the low point, and then could not bring themselves to come back in until it was far too late.

[hatrack]

23. An essentially endless supply of free money tends to keep balloons inflated . . . .

Wall Street would be "optimistic" with a blowtorch up its ass.

[kentuck]

24. The US Treasury (Fed) is guaranteeing loans to special business partners at a low interest rate...

They are using the hundreds of billions of dollars from the first stimulus bill, that Trump and Mnuchin wanted no "oversight" on, to buy back their stocks and drive up the market, in my opinion.

[Horse with no Name]

25. The nod has been given to business that workers are expendable

So there is glee in that for the wealthy.

[dawg]

29. Markets just reflect the beliefs and expectations of people with lots of money to invest.

Many of them believe that the country is ready to re-open for business, and that the worst of this is already over. The market reflects that sentiment pretty accurately.

If events play out differently from those expectations, markets will eventually adjust.

[Demsrule86]

32. It is all bullshit. A huge crash is coming. I will say there are two treatments available now that

are working. I have no doubt people are working night and day on a vaccine. This too shall pass...just a matter of when. Biden will have a hell of a mess to clean up.

[TheFarseer]

34. It crashed already

The Dow went from 29k to 19k. The covid crisis is “priced in”. Unless something new develops.