Pandemic Panic Makes Way For Volatility And Opportunity In Markets

Jul. 4--Bears and bulls have been made extinct by the coronavirus pandemic, giving way to panic trading on the stock market, observers say.

"Nobody has any experience with this," said UMass Amherst economics professor emeritus David Kotz. "During this pandemic, any piece of news people jump on."

That has day traders using apps like Robinhood to help fuel all this volatility, said Dominick Miserandino, CEO of Inquisitr.com Media.

"We're in a culture of reacting to a micro-climate of news," Miserandino told the Herald. "People using Robinhood are bragging about it, but it's like winning money at a casino."

Warren Buffett, the anti-panic buyer, told Berkshire Hathaway shareholders in May: "Never bet against America." The nation, he said, has faced a Civil War, world wars and recessions and the economy will bounce back.

"We haven't faced this exact problem, but we've faced tougher problems," Buffett was quoted as saying, urging his followers to stay the course.

But that's proven difficult as the market remains in topsy-turvy mode with coronavirus cases cooling in the Northeast and spiking just about everywhere else.

World stock markets fell slightly in Europe on Friday after gains in Asia, with trading somewhat subdued by a long holiday weekend in the U.S.

According to Barron's, the market has crawled back from pandemic panic. The S&P 500 index and the Dow Jones Industrial Average are down 3.1% and 9.5% so far this year, respectively. The Nasdaq Composite index closed at an all-time high Thursday, with a year-to-date gain of 13.8%, the publication reported.

The Dow had its best quarter since 1987 with a 17.7% gain, while the S&P 500 finished up 20% in the quarter, its best performance since 1998, Barron's added.

Inquisitr's Miserandino told the Herald the volatility comes as the speed of information is supercharged as everyone feverishly waits for the next morsel of news to turn into a micro profit.

"No one is verifying facts and having a healthy debate," he said. "The pandemic has caused more cabin fever and nobody is taking the time to completely analyze the market. We're in a hyper-analytical culture."

Vaccines, oil, other drugs that first showed promise -- they all take over the day. Miserandino added all this "micro panic" is not reality.

The key is returning the country, and the world, to a shared healthy recovery from the coronavirus and then convincing all that a vaccine is sound science. Wearing masks and slowing the spread of new COVID-19 hot spots will do a lot more for the markets now.

Still, nobody has a playbook for a pandemic.

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