I personally don’t think those companies were losing much except maybe hotels and airlines. The tech, auto and manufacturing etc were on holding pattern IMO. Those that work at those places lost their wages. But when it’s all over people are still going to need things. They just put it off.
I could see stock going down 10/15 percent but not third like it did. But again it was mostly media hype driven for political reasons.
My abbreviated version: 40% + of all $ in the market are computer traded. Algorithms are designed to make money whether market is going up or down. Only stagnant is bad. They cause market to go up then down then up (reason for all the voluntarily - long before the virus). Algorithms create trends then trade based on those trends. Sometimes this trend cycles only last for a few minutes. Humans left reacting to their nonsensical (to humans) trends. Computers always win, humans win from time to time but usually only long periods of time. SEC is investigating the problem and maybe in a year or so we’ll find out if this is our world forever or whether some controls will be placed on computer trading.
For day trading…maybe…but in the long term, companies that are generating a lot of revenue, profit or are believed to have a high potential of doing so in the future are going to perform well and companies that don’t generate a lot of revenue or profit or have a bleak outlook are going to perform bad.
The computer algorithms are simply predicting the fluctuations more efficiently, not the overall direction.
People buy or sell stocks based on what they think is going to happen in the future. When the country was shutdown people saw that would affect business revenue so sold off. When the stimulus was passed then they saw that would mitigate some of the losses so they bought.
Disagree. Computers create short term trends within long term trends. Then they start following othe computer decisions. Creates enormous swings in the markets. But I do agree that long term trends eventually prevail, hence the positive long term impact on the market since Trump won the election.