Will the Fed save Americans, again?
No one knows exactly what the markets will do.
I think most people agree that the current situation is at least in part fueled by easy money, low cost credit, and Federal stimulus.
I tend to think foreign investment due to negative rates elsewhere and all the IRA and 401K money that has to go somewhere is also fueling the market. Even if stocks are pricey compared to the past with no where else for money to go maybe the norm.
Look at Hertz it hasn't made any money for several years before the pandemic, and is on its death bed but people were running the stock up. Hertz had to be confused and tried selling a billion dollars in new stock before the SEC stepped in! LOL
Everybody is in the market making a mint, people are assuming you can't lose. I have no data to show it but I would even assume with such low rates buyers may even be heavily leveraged to extend their profits.
Does all this obligate the Fed to come to the rescue again if and when the bottom were to drop out? I mean they rescued all those mortgages in 2008, Savings and Loans in years prior, and trillions for Corona Virus.
It seems regardless of fundamentals or actual business value everything keeps gaining. Perhaps the deeper you are in the better off you are. Imagine if they wipe out college debt how pizzed the people who paid theirs will be, similarly when Mortgages got a break those who paid their had to be a little miffed. If Uncle Sam bails out the IRA and 401Ks if they take a hit anyone not in the market would also stand to "lose out" on the freebie recovery.
Me I am too old, too poor and too scared to invest in anything but low debt, dividend paying boring blue chips and even those seem to be at lofty valuations.
Why don't we go to school and work on the weekends and take the week off!