I've been watching the market pretty broadly and while I agree...

I've been watching the market pretty broadly and while I agree with the general sentiment here that APX is due to come down, I'm not convinced the market is acting as irrationally as it seems.

Across all my watchlist there was the big drop in February/March that we all know about, and it started off as a V-shaped recovery but that slowed down pretty quickly. Since then most stocks have been slowly climbing back towards the early February trend line with a few exceptions (APX, APT etc.) that have instead had impressive runs. By my estimate, the recovery is about 50% complete which sounds about right for the current global state of things.

America's covid death toll is about to scream up but from a regional perspective it looks to me like most of that is through the middle of America rather than the wealthier states who have already dealt with the virus enough to get it under some form of control. Australia is very obviously heading towards a second wave but we all already know that.

With the US feds printing money and various schemes like Jobkeeper etc., what else does one do with their money? Cash - inflation. Real estate - mortgage defaults from unemployment making price crashes likely. Savings and/or bonds - incredibly low interest rates. Lending - risk of defaults. The stock market is the obvious place to put money not needed for bills and cost of living etc. and right now the US has shown that the economy will be propped up, and Australia has shown it's picking up the tab for households.

Which stocks are flying off the shelves? The ones least likely to be affected by covid (technology, BNPL etc.) and by all accounts it looks like tech has replaced gold as the safe haven. If you ask me, it looks like investors are rebalancing their investments into covid-friendly stocks while the market recovers from the March scare. That recovery seems to be about 50% underway, which seems about right given the current climate, risks of a second wave, American mishandling of the virus, pivots away from China etc. Obviously earnings and estimates are going to be pretty rubbish right now but they're not as bad as they could have been and markets are forward facing.

While APX could very well come crashing back down, it's standing out as a performer during covid and I think that's going to be the main focus for markets until covid is dealt with. At that point a big market-wide recovery seems likely and that's when I think things will rebalance across the market.

Another market-wide crash is always possible but I personally don't see it happening while stocks are the only thing worth putting money towards for investors. I'll reevaluate in September but I think everything will be extended by then and will continue to be extended until the unemployment rate is under control.

I don't know about anyone else but to me the current climate has changed the way we do things and with that comes opportunities. Opportunities to start new businesses (based online/from home) or for businesses to expand into new areas (vaccine research, hand sanitiser etc.), or to stand out as resilient to global epidemics etc. Covid has created a lot of uncertainty across the world but every day we learn more and things get that little bit more predictable.

Tldr - the markets are slowly recovering from March and prioritising covid-friendly investments. The financial hangover is coming but not for a while.