[unFou]

How it was explained to me is that the markets don't always reflect the economy because the negative outcomes have already been priced in. So, if the markets were expecting a downturn in the economy of -20%, but the economy actually went down -15%, then the market might go up, even though the economy is still doing worse.

Another possible explanation is that we're currently print a lot of money without producing much stuff. So, inflation should be happening, right? But people can't really consume any goods or services. And so it's the prices of investments that gets inflated. (this explanation is a bit more iffy to me though than the first)

[flyinglizard]

My feeling is that investors have steadier hands now after they've witnessed the 10+ year rally after the 2008 crash. No one wants to be left out. Eventually though the market will catch up with what's happening on the streets (unless the fed keeps pumping money in).

[bathtub365]

The DOW dropped almost 13% on March 16th. That's the biggest single day drop since 1987. How is that evidence of investors having steady hands? Multiple market volatility trading circuit breakers have been tripped since the crisis started. How is that evidence of investors having steady hands? All I see is an extremely complex system with the ability to be reactionary, irrational, and volatile.

[flyinglizard]

Single day drops are anecdotal. Overall drops in S&P500 are much lower, so far, then they were during the 2008 crisis. I’m saying “so far” because eventually the stock market will catch up to what’s happening outside. It’s just that in 2008 economic activity did not come to a halt like now and yet the stock market saw a larger impact.

I think that the sentiment today is that governments and central banks will not allow the market to collapse for as long as they can (a point which no one can really point at).