The most important thing right now is to follow the situation with the virus and how the situation unfolds. Look at these charts. The volume of new cases is increasing.
The virus has reached all parts of the globe.
For various reasons America has become the epicenter of the virus.
I see a tendency that people do not return to their previous daily routine in countries which are considered rather safe from the virus. See the tomtom Traffic Index data . It is rather obvious that people move less, thus reflecting general mood and overall caution.
And, speaking of “safe” or “calmer” states, some proper precautions take place to prevent possible outbreak in such places of paragon like Hong Kong: As of 7th of July, Hong Kong’s Education Bureau announced the suspension of all schools due to spike in coronavirus cases.
I don't think that the second wave of COVID-19 will be as dramatic and as widespread as the first one. Most of us have acquired some experience and proven procedures that works to stay safe and even keep moving. COVID-19 tests are much more available, and countries are more aggressive in their response to the virus taking more preventive measures without hesitation, if necessary. Of course, there are “non-believers”, conspiracy activists in any society who do not wish to submit to the “new order” but they are not majority and eventually they will get used to it as well in one way or another.
Tourism industry is experiencing its worst times and yet the optimism in the markets is unbelievable. This is best illustrated by the recent rise in Tesla shares.
60% of increase in less than three weeks!
It seems that more and more folks are trying to “jump on the train” to join the action. When I look at the Robintrack data (keeps track of how many Robinhood users hold a particular stock over time), it reminds me of “Bitcoin mania”. Most of us know how it ended, right?
So, I would suggest keeping in check your emotions and not let the FOMO (Fear of Missing Out) guide you, so you won’t have to “jump off the train” later blaming everything but yourself.
Of course, some of you can tell me that my opinion of Tesla shares is biased since I haven't bought Tesla shares myself. I just can't do it, seeing auto industry data. It just doesn't make sense to me. Yes - we can discuss that Tesla is not just a car company, but for me it doesn’t help to press the BUY button.
I see all this optimism in the markets as some sort of hope. The hope that everything eventually will be fine. Despite all the news, theories and opinions that seemingly tries to convince you otherwise. The hope that the government and central banks will come forward and provide needed support when it will be needed.
However, I tend to think that for many the feeling of disappointment will be very severe, though…
Stay tuned!
Agris