Without belaboring the point, the level of uncertainty and disagreement in the markets is something to behold…
… particularly so in light of valuations that have cleared.
Perhaps there is a price distortion in that the tech Big 5 make up 20% of the index, and have done well enough to drag it up by association. Or perhaps low rates and volatility are driving option value up, or possibly it’s just as simple as the age-old process of elimination: “What else are you going to do to make a buck when nobody is paying?”
And it may also be that retail speculators, having once missed out on the historic chance to buy the dip, are eager to not miss the opportunity again.
Most likely it’s a bit of all of the above, and other factors that don’t hurt to build up economic confidence even when the fundamentals fail.
The markets, as always, are a hodgepodge, everybody has their reasons… rational or not… and anyway, who’s to say? We will look back one day, no doubt, nostalgically with bemusement, reflecting on the rights and wrongs, how obvious it all was. But we’ll still likely disagree on which obviousness was most glaring and which most subtle, the arguments of which might lead to other market trends one day, when that day comes.
Until that time, it’s interesting to watch the outliers, the creatives – whatever that might mean and where you draw the line – as this turbulent experiment in a dark room runs its course. A few examples follow, worthy of consideration and the imaginary investment memo in our mind that may support the move.