Weekly 123: Stocks Surge, Coronavirus Update and the Bursting of the "College Bubble"
Hope you’re having a great Friday.
After a gut-wrenching six week drop (the fastest in history), the S&P 500 has surged by an astounding 42 percent (as of this writing) from the March 23rd lows, and is now at a level last seen on March 4, 2020.
Meanwhile, more than a few market strategists are scratching their heads, asking themselves how stocks today could possibly be priced at pre-pandemic levels. This with over 38 million unemployed, more than 100,000 Covid-related deaths in the U.S. to date, and now social unrest at the highest level we’ve seen in over 50 years.
The MULTI-TRILLION dollar fiscal and monetary stimulus launched in hopes of backstopping the economy (and financial markets) is certainly a major factor. In fact, much of the recent advance in stocks can probably be attributed to the anticipation of MORE stimulus to keep things rolling.
One of the most difficult things for investors to grasp is the tendency for the stock market to lead the economy, both on the downside as well as the upside. It’s also important to remember that markets often “overshoot” (in both directions), and while stocks seem to be pricing in a perfect “V-shaped” economic recovery, there is always the risk that prices get ahead of themselves. We shall see.
Here is 1 great quote, 2 recent posts from our blog and 3 interesting links that you may want to check out as you head into the weekend:
1 great quote:
“Difficulties and adversities viciously force all their might on us and cause us to fall apart, but they are necessary elements of individual growth and reveal our true potential. We have got to endure and overcome them, and move forward. Never lose hope. Storms make people stronger and never last forever.”
― Roy T. Bennett, The Light in the Heart
2 recent posts from our blog:
A Letter to a Younger Generation (Mine Included)
In light of the extraordinarily tough spring we have all had to endure, and now the abhorrent violence spreading throughout many of our great American cities, I thought this important message should be shared as a reminder of the challenges that our parents and grandparents lived through and overcame. (Read More)
Coronavirus Update: Reopening on Track, but Protests Introduce New Risks
We are now three weeks or more into the start of a new environment for the spread of the virus. Not only has there been no significant increase in the case growth rate, but case growth itself has trended back down to around 20,000 per day. The real question now is whether recent public protests will generate another wave of infections. We won’t know the answer for at least another two weeks, but this possibility is something we must keep an eye on through June. (Read More)
3 links worth checking out:
How the Pandemic Could Disrupt Higher Education
Is a reckoning coming for colleges and universities as a result of the pandemic? This professor of Marketing at NYU Stern School of Business makes a very compelling case that the “College Bubble” may have finally burst. (View Video)
Here’s how unpaid debt is handled when a person passes away
What happens to unpaid debts when someone dies? The answer depends on both the type of debt owed and the laws of the decedent’s state of residence. (Read More)
The Great Realization
Here’s a heartwarming bedtime story to end the week on a positive note. (View Video)
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Have a great weekend!
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