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by rixrax 2270 days ago
And yet DJIA is up almost 1000 points. Is this the stimulus $$$ in work, or what is going on here?
4 comments

Markets are complicated. Especially in the short term, you have large forces that aren't concerned only with future expected value.

For instance, if you manage a fund that sold substantially on the way down, you now have a great deal of cash you need to do something with. Considering a 'local bottom' has been found, you may be very interested in trying to re-enter the market now. The risk of waiting for a lower entry begins to compete heavily with the risk of missing a buying opportunity.

Job losses are expected and are priced in (which is why it crashed a couple weeks ago). The job losses were less than some expected so the market went up.
Unfortunately, it's called "a good time to get the heck out if you haven't already."
Panic selling is generally a poor strategy. Feel free though I'd be happy to pick up some more cheap VGRO.
You don’t think it’s a good time to “panic sell” when the market goes up 20% in just 3 days?

Edit: especially while the US corona curve is not showing any signs of slowing down.

This has got to be a dead cat bounce.

Normally, when a company lays off workers, the market cheers, and the stock price goes up. Investors get to keep more of their money, and no longer have to pay out in expensive labor.

But this situation is quite different, in that the economy just came to a stop, for practically everyone. At some point, this has got to trickle up, and affect the larger corporations. People won’t fly, so airlines go bankrupt. Hotels go bankrupt. Travel Agencies go bankrupt. And on and on.

But of course, maybe Wall Street is expecting a bailout of the airlines, and other big businesses, so maybe that explains the optimism.

Unlikely. I suspect it's more likely month-end re-balancing.