An interesting article called The stock market wants to embarrass the experts.
“The Dow (^DJI) is up 26% from its 52-week low, while the S&P 500 (^GSPC) is up 25% from its low on March 23rd. On Thursday The Nasdaq (^IXIC) closed above its 200 day moving average for the 2nd time in three trading session as Amazon (AMZN) and Netflix (NFLX) reached all time highs.
The rebound comes despite a backdrop of weekly unemployment claims in the millions, a historic plunge in retail sales, and the biggest drop in manufacturing since 1946. Goldman Sachs predicts GDP in the U.S. will shrink a whopping 24% in the 2nd quarter, and rebound in the 3rd and 4th quarter.
Over the past weeks analysts and investors have warned we are not in the clear yet and to watch out for a ‘bear market trap.’
“So many strategists are calling for a retest that Mr. Market will try to embarrass the greatest number of strategists at any one point in time,” said Stovall.”
Source: Yahoo Finance
Stock market and fundamentals
For now, there is positive momentum in the stock market as there is news about reopening the US economy. The point is though that unless we get more reported news about actual earnings, to evaluate the stocks that moved higher or lower on anticipations with real data, we cannot tell that the real bottom was made on March 23, 2020. We may not reach that price levels but we cannot tell that another selloff is not possible. This makes stocks to buy, stocks to sell and stock investing now more complicated and risky.