08-20-2020, 03:23 PM
The stocks that are setting new highs are a small subset of the total universe, ones that are benefiting from COVID.
The vast majority of stocks are below their February highs, with certain categories well below their level then, including hotels, airlines, and real estate. And many of the businesses and workers that are being hurt the worst are the owners and employees of small businesses. Some of their larger competitors are able to scoop up market share at their expense.
If COVID had not intervened, we would have expected markets to have increased further by now, given the bid by politicians for votes.
And clearly, the extraordinarily low interest rates are helping support the prices of dividend-paying stocks.
If the unemployed do not get their support extended, that will reduce the money flowing to many companies, but the consensus now is that the money will continue to flow.
And finally, the Robinhood and stock slice phenomena are driving new money into already high-priced stocks.
The vast majority of stocks are below their February highs, with certain categories well below their level then, including hotels, airlines, and real estate. And many of the businesses and workers that are being hurt the worst are the owners and employees of small businesses. Some of their larger competitors are able to scoop up market share at their expense.
If COVID had not intervened, we would have expected markets to have increased further by now, given the bid by politicians for votes.
And clearly, the extraordinarily low interest rates are helping support the prices of dividend-paying stocks.
If the unemployed do not get their support extended, that will reduce the money flowing to many companies, but the consensus now is that the money will continue to flow.
And finally, the Robinhood and stock slice phenomena are driving new money into already high-priced stocks.