You’d be forgiven for thinking that nothing can dampen the irrational exuberance driving this bull market.
In the US, the S&P 500 and Dow Jones joined the Nasdaq in closing for new record highs.
The tech-dominated Nasdaq is now up 31.1% over the past 12 months. Sans dividends.
The major European indices all closed in the green as well.
And the ASX 200 is up 0.18% at time of writing. That puts it within a whisker of its 22 January all-time high.
Never mind that the coronavirus — optimistically reported to be on the wane just this morning — now appears to be anything but.
This headline, as an example, came from ABC earlier this morning, ‘Investor fears about outbreak ease’. The article notes:
‘The market optimism came as investor fears about the coronavirus outbreak eased, with reports the pace of its spread had slowed.’
You may have read something similar over breakfast and felt a glimmer of hope we humans have gotten ahead of this virus. But just hours later the story was drastically different.
This update on the pandemic from CNBC came out before the lunch hour:
‘China’s Hubei province reported an additional 242 deaths and 14,840 new cases as of Feb. 12 — a sharp increase from the previous day.’
There are also now 50 confirmed cases in Singapore, 15 in Australia, and 14 in the US.
Like Australia and most of the developed world, the US is taking the potential for an outbreak seriously. As demonstrated by this headline from The Military Times, ‘US military prepping for coronavirus pandemic’.
The US military may be prepping for a pandemic, but investors won’t have a bar of it.
Nor will the pundits at Domain. They’re forecasting average Australian home prices to increase by 8% this year. Sydney’s meant to lead the charge with 10% price gains. Sydney home price growth is forecast to slow to a ‘meagre’ 6–8% in 2021.
And this with the Australian Bureau of Statistics reporting that the average mortgage people are taking on for existing homes has reached a record $500,000.
No worries though. The mantra goes that the house price surge is going to ‘fuel a broader economic recovery’. Not to mention that the central banks have our backs.
We can only hope the optimists are right.
But we have our doubts.
Ed note: Whether a market crash is imminent or still years away, there are some stocks on the ASX that are destined to lose you money. In this free special report, The Rum Rebellion editor Vern Gowdie details five stocks he recommends you sell IMMEDIATELY…and why. You can access that report, for free, right here.