There is almost a desperate need to see and hear only good news.
All around for over two months now, all that we have been seeing and hearing is doom and gloom – death, sickness, depression, dirty politics, racism, cyclones, unemployment, hunger; almost everything that we as human beings loathe to face is coming at us one after the other. Be it online or television, somehow all seem to be feeding off negative and more negative news. Its almost like a rat race – each trying to outdo the other in this battle to increase TRPs with negative news.
We are in a situation whether rich or poor, urban or rural, no one seems to have an escape plan from this pandemic. Even the richest man on earth cannot buy himself out of this crisis. There is literally an overdose of negative news and this is leading to anxiety and depression, all the more pronounced for those confined to homes. As someone rightly said, “there’s a lot of negative energy on steroids going around—from television, social media and WhatsApp.”
And that explains why ‘good news’ is today among the most searched word on Google. We see the market up on a day when India records the highest number of corona cases and instead of feeling incredulous and feeling that the market is so disconnected from reality, it feels good – at least something is in the green today.
The moods have to get better as we will see more people walking on the streets, albeit with masks on their face, the honking sound of the vehicles on the road, airlines taking off, shops opening up – all signs that slowly but surely, we will emerge out of it. That’s the message which the market is giving us every time it closes in the green.
Factories are getting back on their feet, first at 50% capacity and now many at 70 to 80% capacity and the market is looking only at the future – the pandemic has been discounted with the sharp fall in March. We will see blips of fall as Q1 earnings come in but not as bad as what we saw in March.
Also across the globe there have been stimuli given by most Govts. There is currently a lot of money in the system and for now, instead of getting parked in credit or new investments/acquisitions, it is getting parked in the markets, in one form or the other. And till the money starts going back to credit, it is the equity markets which will remain in the green. So right now, the market is looking at the good news on the supply side – factories slowly getting on their feet. It will take 2-3 months more to get things back in order. But once the economy does find its feet, it is only then that the market will start looking at the demand side and that is what will later determine the market trajectory.
The moot point to be noted here – we can learn a lesson from the market; when all around there is gloom and doom, it has decided to focus on the future. Yes, there is a disconnect but at times like these, when we are starved for good news, this is good.
Maybe the virus will bring about this structural change in us – instead of always seeking out negative news, our system will evolve to seek more optimism, more happy news. That’s probably another life lesson Covid is teaching us…