Do not pretend the past 2 months did not happen. You wonder why it "did not tank" but it DID TANK. It tanked when risks were unknown and everyone with a calculator could understand that exponential spread could kill large numbers.
Now 2 months later the exponential spread has been controlled. Now 2 months later those who think the economy is going to disappear have already sold. Anyone holding stocks now is doing so because they think Coca-Cola is going to be worth a lot of money over the next 30 years. Short of new and surprising bad news the market has no reason to price in further uncertainty.
2009 saw lows not seen in over a decade.
Do you feel the economic outlook and prospects for growth are the same now as they were in June 2019 when the S&P 500 was at a similar level?
Honestly I think the jury’s out on whether double-digit percentages of the S&P exist in their current form 2 years from now, even with the US government interventions.
Perhaps the market is pricing in inflation instead of real growth? Perhaps it's because there's literally no other way of investing your money right now?
It's really become hard to say. The downturn in the previous weeks seems to be way too weak given the current circumstances.
People can point to algorithms, QE, things being priced in, speculation that everything will return to normal as quickly as it stopped. Or maybe it'll go the other way and something will trigger a collapse that brings down a house of cards.
Nobody knows with any reasonable amount of certainty. The best we're going to get is when all this blows over and we can do some kind of post-mortem.
When the Fed prints money, you buy SPY and real estate.
Market priced simply included that as a fact. Verbal interventions work!
There is unlimited amount of money and a buyer (FED) determined to buy everything (ETF, junk bonds, baseball card) regardless of price and underlying financials.
So for people who have capital there are guarateed returns in stocks. For the little guy it is other story.
If you consider the price of an asset as the expected value of its probability distribution over possible values, then you cut off the negative tail of the PDF by creating a price floor, the expected value shifts significantly to positive.