What do the numbers mean that I mention in the title?
The DJIA closed above 30,000 for the first time ever yesterday (Nov 24th), at 30,046.24 (Yahoo Finance)
Bitcoin closed above $19,000 (at $19,045.74), the first time it’s closed above $19,000 since Dec 17th 2017 (Cointelegraph)
The NASDAQ Composite closed above 12,000 for only the second time ever yesterday (12,063; only other time the NASDA Composite closed above 12,000 was on Sept 2nd of this year, at 12,056) (Yahoo Finance)
In the face of rapidly increasing cases of COVID-19 in the US – and having just passed the peak in Europe – why have the markets been on fire? Let’s see….
These very positive pieces of good news are overwhelming the obvious “fly-in-the-ointment” of a challenging year end and start of 2021 for most economies because of the increasing economic costs of addressing the spread of COVID-19, with the exception of China and a few other countries that seem to have things under control.
What could possibly go wrong? I guess that’s what bothers me most because we seem to be out of good news.
If you recall, I wrote about Wharton professor Jeremy Siegal’s stock market outlook in light of COVID-19 on June 25th(article in emorningcoffee.com is here), reflecting both an earlier presentation at the Wharton Alumni week in mid-May followed by a very interesting interview on Bloomberg Opinion with Barry Ritholtz in mid-June which you can find here. During the May and June interviews, Dr. Siegal was bullish on the equity market outlook even though things – at the time – looked much more uncertain that they do now. He was right of course, at least up to now. More importantly as we look forward, he remains very bullish into 2021. You can listen to (or read the summary transcript) of a podcast he did yesterday (Nov 24th) on Knowledge@Wharton here, to better understand why he remains so bullish.
I have stayed well long equities, but I continue to have this uncomfortable feeling that we might be running out of good news to support the ever-increasing one-way trajectory up.