The thing though is that the global economy had already been slowing since 2018, with many countries already experiencing an industrial recession. Interest rates for most western countries have been near zero, and like you say, have been seen as the norm. Households have very low savings with savings ratios at historical lows due to low interest rates and increasing expenses. Companies are crazily over leveraged as credit was cheap, so it was easy to borrow on the promise of future growth.
The virus couldn’t have come at a worse moment as our economies were already floundering and central banks have few mechanisms left, other than below zero interest rates and QE Infinity - neither worked out well for Japan, whom experienced FOUR recessions since 2008.
The US stock markets are near ATH with select stocks already at ATH, whilst 30m+ people are unemployed, CPI fell off a cliff, oil went momentarily negative, and now even the Fed is forecasting annualised -30% GDP for Q2 and years before we have recovered.
Reopening the economy and then thinking that it’s all puppies and rainbows is an illusion. The Far East has shown that, and spending patterns will have changed at least for the intermediate term. Let’s not forget the US economy is 70% consumer spending, what will you spend when you’re out of work, or how much will you spend when you’re worried about your job? Data has shown that of the 30m+ unemployed, at least 2/3 are continuing claimants who won’t have a job to go back to easily, and the wave of bankruptcies has only just started.
At on top of that the Q1 earnings were bad, imagine how they will be in Q2 when they reflect a full quarter of lockdown. People say the market is forward looking, but economic gravity will take hold eventually.
Although the market has been going up, its now in a side wards movement with lower highs and higher lows. It’s consolidating, but against the backdrop of lower volumes - this indicates people have lower conviction.
The market is driven by hope, and greed, rather than anything else. People discount negative news and exacerbate the good news. Powell was on Friday very negative about the economic outlook, even though he presented it as a shit sandwich, and the market didn’t care and instead rallied on the hope of a tiny trial of Moderna, a company that has been numerous times likened to the next Theranos and were conflicts of interest are so bad, I would argue it’s at best cronyism and at worst corruption.
The market rally has been driven by a tiny amount of FOMO stocks that the retail sheep en-masse flock too, but the vast majority of stocks have been down. Currency, bond and commodities markets get it. International stock markets do too, it’s just the US stock market is the exception as other countries don’t have “pump channels” like CNBC where talking heads like Jim Cramer irresponsibly shout “buy buy buy”.
The market tethers on a precipice and it won’t take much - either opening of the economy and re-emergence of COVID, or Q2 earnings that will result in a wave of bankruptcies.