Bulls are in good position for another shot at Dow 30,000, not that anyone should have doubted they’d be back. Few could have foreseen, however, that their second-wave assault would come so soon. It was only last Friday that stocks were getting hammered on fears that coronavirus would take a toll on the global economy. It will, of course, but this has had little net effect so far on stocks that are constantly being pumped by giddy portfolio managers who are paid to throw Other People’s Money at a small handful of high-profile stocks.
Oil Traders Know Better
Oil traders know better and have pushed quotes down into bear-market territory in response to the already significant curtailment of economic activity in China. Copper prices have fallen sharply as well, with the implication that the Fed may soon be battling deflation. Again. But with what? The interest rates the central bank controls are already too low to get much pop from easing. The alternative is prayer — that China and the world are able to contain the virus quickly and convincingly. This can’t happen too soon if U.S. stocks are going to sustain altitude. A short ascent to Dow 30,000 seems inevitable in any event, but there will remain the possibility that this historical benchmark could become the Dow 1000 of this era: very closely approached in 1966, but not exceeded until 17 years later.