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In the scope of three months, markets have experienced a range of moves that typically happen in a decade. The velocity of movement has been breath-taking. The sentiment went from “I can’t believe that the market has gone down so much so fast. This is just the flu. There’s something wrong” to “I can’t believe the market has gone up so much so fast. This is one in a 100-years health and economic crisis. There’s something wrong”.
Financial markets constantly try to discount events that haven’t happened yet. Sometimes, they are great predictors of what’s to come. Other times, they are terribly wrong. The price action is currently projecting that everything might be back to normal a year from now. It seems counter-intuitive, but the facts are the facts.
The digital economy stocks were thriving and the old-economy stocks were under pressure for a decade. The current health and economic challenge will only accelerate those trends.
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