Improved company earnings in the quarters ahead and a breakthrough Covid treatment or vaccine could buoy stock prices. But the real catalyst will be government intervention
by Nigam Arora
The stock market has been detached from economic reality. Investors, drunk with “hopium,” bored at home and unable to bet on sports, have turned the stock market into a casino.
The stock market always looks ahead. It’s sensible for investors to gaze beyond the valley caused by the coronavirus toward good news on earnings in 2021 and a vaccine for the deadly virus.
Pfizer has released promising early results on a coronavirus vaccine, along with partner BioNTech. Other companies are also in the running.
However, such optimism does not justify the extent of the strong stock market rally from the lows. The real impetus behind the market’s strength is money printing by the Federal Reserve and borrowing by the government. Now politicians have set up the stock market for a decline this month.