Fears related to coronaviruses hit stocks hard, the Dow Jones Industrial Average lost nearly 11,000 points, or 38%, compared to the peak of 29,423 recorded in February. To date, the markets have partly ignored the shock and recovered about half of their losses. The shares now go up to 23,719 on the DJIA, just 20% of their highest records. The Dow Jones today, which has just had its best week since 1974, is higher than last year. In other words, since the night Donald Trump was elected president, the Dow Jones has risen by about 5,400 points, or 29%, in about three and a half years. If Barack Obama was president, I suspect the media would spread the word about how his wise decisions soothed the markets in an age of unprecedented chaos and calamity.
Mr. Market, however, is a curious figure. Recall that in December 2018, fears of a small recession that never really happened caused the Dow Jones to drop 4,000 points, which brought it down to 22,445 on December 21 of the same year. Today, in the midst of a breathtaking real economic contraction, with all kinds of scary variables unfolding in an unknown way, the Dow is at a higher level than it was then. Is the US economy really stronger than it was 16 months ago? It was the week that a lot of the “It’s not going to be as bad as we feared” catch appeared in the news, but there is still a lot of economic misery to come. I have the impression that the markets celebrate prematurely.