What's up Stock Market Price Floor?

The stock market is refusing to drop lower!! Even with record amounts of cash in money markets and on the sidelines, the stock market is either stagnant or moving higher. (Graphics 1-3). The US stock market is discounting a new expansion in its price while we only just began a major recession. The problem we are facing now is another rise in COVID-19 cases, which means tighter regulations, fear spiking, and lockdowns and hibernation beginning again. The US economy can not face another shutdown. Even though large corporations, like Apple, are shutting down some of their stores…again, small companies can not face any more economic shock. I am very certain that the rise in virus cases are due to three factors: 1) more testing, 2) the protests caused and are furthering the spread, 3) the weather is becoming hotter and while the hot weather was supposed to kill off the virus, people are staying inside with the A/C blasting and are becoming infected. The Federal Reserve pumping billions of dollars into the market is causing the market to stay-in-place; stagnant. (Graphic 4) Soon we may see what happens when the Fed stops the capital injections or slows them down. The Fed buying does not prevent defaults and it just shows how low long-term returns will be.

Dear Reader,

​The Market.

• Global stimulus in 2020 = $18.4 trillion (21% of world GDP).
• US virus cases rise 1.4% faster than the 7-day 1.1% average.
• Sector dominance in the 21st century has mostly been information technology and communications. (Graphic 5)
• “The coronavirus-induced slump has worsened economic inequality that has log existed in America, creating more suffering for low-income workers and minorities”- Jerome Powell.
• Cool graphic.
• Retail sales and spending are rising but people are still hesitant to fly. (Graphic 6-8)
• Credit card defaults are increasing. (Graphic 9)
• Financial inequality continues to widen. (Graphic 10)
• Bankruptcies are closing near 2008 levels. (Graphic 11)
• Housing sales and mortgage applications are increasing during this time. People are choosing to relocate… (Graphic 12)
• Company profit margins are decreasing while the stock market keeps increasing. (Graphic 13)

Current Risks.

• Consumer credit card defaults.
• Unemployment benefits ending while permit unemployment from the pandemic exists.
• A worse wave of viruses

Current Questions.

• Where will investment return come from if it's expected to be so low? (Graphic 14)
• Will Gold reach the $2,000/per ounce price target?
• Are the Feds preventing and restricting the natural flow of the business cycle and the nature of capitalism?