Even the optimists are starting to understand that rallies are to be disbelieved and sold, not cheered. It’s one thing for the stock market to shrug off tariff wars, geopolitical tensions and impeachment hearings. But the pandemic poses a threat potentially even more grave, and there are simply too many uncertainties at the moment about how it will play out for stocks to stage a sustained rally. Will the U.S. escape a major outbreak, or will we instead live under economically crippling rules of quarantine like Italy? Still worse would be to have protocols similar to China’s imposed across the length and breadth of North America. It appears that China’s stringent containment measures are working and that the spread of coronavirus there is finally slowing down. If America is forced to take similar steps, we could be in for a long hot summer: no dining out, no concerts or ballgames, maybe even no backyard barbecues with neighbors. All of that seems a stretch at the moment, but no one can rule it out, least of all investors who are understandably eager for America to get back to business as usual.
Too Many Uncertainties for a Sustained Rally
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