How can the S&P500 be just over its historic highs or the Nasdaq to be making gains in 2020, while there were 33 million unemployment claims in the US, equivalent to 20% of the workforce and when non -farm payrolls revealed a loss of 20.5 million jobs in April, leaving an unemployment rate at 14.7%, the highest since 1948 in the world’s largest economy. This is the question that hangs in the minds of most investors, analysts, but also of Main Street, which sees with some concern the record that Wall Street is having in the last month.
On the positive side, since the stock market generally anticipates the economic reality in six months, this could mean that investors believe in a very rapid recovery, which for now is a huge unknown, but on the other hand it could result in a very significant disappointment in the short-medium term in the market, which would precipitate a new wave of sales and most likely new lows in the year. In any case, I would like to warn you about the apparent calm that we are experiencing now, with the volatility dropping to more “normal” levels, however this could be just another Bear trap.
