This morning what I saw in photos and videos from this past Memorial Day weekend was a country rushing pell mell toward re-opening the economy without a thought for safety amidst a still uncontrolled coronavirus outbreak. I saw photos of crowds at beaches, on board walks, outside restaurants, and at church services with potential virus carriers (aka people) packed cheek to jowl with hardly a mask in sight. Looking at those pictures, I shuddered at the probability of a new surge in the virus in roughly two weeks, the commonly understood incubation period for the virus.
Wall Street viewed the same pictures a I did but what traders and investors saw was evidence that the economy was headed toward a resurgence of growth. Those weren’t disease vectors crowding the boardwalk, they were consumers coming out of shelter and buying. As for any worries about a new surge in the virus, as best as I can tell, the thought in the market is that we’ll have a vaccine in time to handle it. That’s extremely unlikely but hey, it’s what Wall Street wants to believe today.
As of 3 p.m. New York time today, May 26, the Standard & Poor’s 500 is up 1.81% and the Dow Jones Industrial Average is ahead 2.68%. The NASDAQ Composite is higher by 0.72 and the Russell 2000 small cap index has climbed 3.35%. The iShares MSCI Emerging Markets ETF (EEM) has gained 2.88%. The CBEO S&P 500 Volatility Index (VIX) continued its slide lower dropping another 1.70% to 27.68. The VIX stood at 82.69 on March 16 amidst the collapse from its record high. The “fear” index has not been this low since February 26.
I don’t know how much of this optimism is a side effect of the re-opening of the trading floor at the New York Stock Exchange for human trading. Some I’d assume.
But certainly today the financial markets don’t want to hear any bad new be it about the coronavirus or the U.S.-China trade  war.
I would note that Wall Street makes money on trading and hedging risk. So a rally today followed by a drop tomorrow is positive news for a significant part of the Wall Street revenue stream.
Okay boomer, it’s just the sniffles right? America is doing great again, we are huge #1 in deaths and infections! Very powerful and Incredible accomplishment. I would give us an A+ in how we’ve handled this better than anyone in the history of the world!
You’ve been watching way too much cnn and msnbc! Stop believing the idiotic hateful demoncrat governors who are dragging their feet to hurt the economy and POTUS Trump re-election chances.