By Mark DeCambre, MarketWatch
What happens when everything rises all at once? That’s what some investors are scratching their heads about as they look out at the current landscape on Wall Street.
On Wednesday, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.62% , the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.36% and the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.35% indexes drifted toward record territory—seemingly inoculated from coronavirus contagion.
Speculative stocks like electric-vehicle maker Tesla Inc . /zigman2/quotes/203558040/composite TSLA +0.13% , and Virgin Galactic Holdings Inc . /zigman2/quotes/208333884/composite SPCE -13.74% , a space tourism company that only began trading publicly three months ago, also surged. Virgin’s stocks is up 118% this month, while Tesla has gained more than 41% over the same period.
But it’s more than just those names.
Gold prices are trading near the richest levels since 2013 and the U.S. currency, as measured by the ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.22% , is hovering near its loftiest level against a basket of a half-dozen rival currencies, in more than a year.
Another asset, bitcoin /zigman2/quotes/31322028/realtime BTCUSD -0.44% is barreling above $10,000, approaching its highest level since August, according to FactSet data.
Frank Cappelleri, executive director at Instinet, wrote that 19 exchange-traded funds were at or near records, including the iShares Global Infrastructure ETF /zigman2/quotes/203179113/composite IGF +1.50% , Utilities Select Sector SPDR ETF /zigman2/quotes/206645117/composite XLU +1.10% and First Trust Dow Jones Internet Index Fund /zigman2/quotes/200286380/composite FDN +0.37% .
Meanwhile, a number of bond-pegged ETFs, which wouldn’t be expected to rise while equities are gaining, were also near their recent highs, including iShares Core U.S. Aggregate Bond ETF /zigman2/quotes/200660887/composite AGG +0.19% and iShares iBoxx $ Investment Grade Corporate Bond ETF /zigman2/quotes/206919681/composite LQD +0.37% .
It’s almost as if investors putting money to work this year can’t lose, and that setup has caused some confusion among strategists, investors and analysts.
Cappelleri said he’s unsure if this is a true “everything” rally but advised caution.
“So, whether one thinks this is an ‘everything’ bull market or not, it’s clear that various assets are rallying concurrently right now. And that makes it important to stay on the right side of those trends for as long as we can,” he wrote on Wednesday.
On Tuesday, hedge-fund billionaire Leon Cooperman told CNBC that he saw euphoria in pockets of the market. He said “we’re at the early stage of knocking on the door of euphoria but not quite euphoria.”
Michael Antonelli, market strategist at Robert W. Baird & Co., said that the market’s multiasset rise can be attributed to one thing: “unprecedented stimulus.” Notably, easy-money policies from the Federal Reserve, which has kept U.S. benchmark rates at a 1.50%-1.75% range, with investors betting that the central bank will be more inclined to cut rates than to raise them in the near term, particularly with China’s COVID-19 outbreak emerging as a global threat.
Antonelli said the viral outbreak accounts for much of the catalyst for the state of play across markets. The infectious disease that emerged in Wuhan, China last, year, has hamstrung the world’s second-largest economy. How significantly it has hurt China remains to be seen.