“When you put a fire under a pot, you learn what’s in it.” — Malcolm X
If a deadly pandemic overtakes the world, but the market looks past it, did the pandemic really happen?
The equity markets staged a dramatic rebound during the quarter as local economies opened across the country. The question for investors is, how can the market turn so positive when data points to rough months ahead?
The short answer is “because the market is forward looking.” Investors are peering many months into the future to a point when Covid-19 fades away, the population gains herd immunity, or researchers find an appropriate treatment or cure. Investors are looking past current data towards a recovery.
Should the Market be so confident?