The Wall St. Bull on a nearly empty Broadway in the New York financial district as the coronavirus outbreak continues, March 23, 2020. (Mike Segar/Reuters)

Coronavirus fears hit stocks hard, with the Dow Jones Industrial Average shedding nearly 11,000 points, or 38 percent, from the February peak of 29,423. As of today the markets have partly shrugged off the shock and recovered about half of their losses. Stocks are now back up to 23,719 on the DJIA, only 20 percent off their all-time highs. The Dow today, having just had its best week since 1974, stands higher than it did on New Year’s Day of last year. To put it another way, since the night Donald Trump was elected president, the Dow is up about 5,400 points, or 29 percent, in about three and a half years. Were Barack Obama president, I suspect the news media would be gushing with reports about how his wise decisions had calmed markets in a time of unprecedented chaos and calamity.


Mr. Market is a curious character, though. Recall that in December 2018, fears of a small recession that never actually happened knocked 4,000 points off the Dow, driving it all the way down to 22,445 on December 21 of that year. Today, in the midst of an actual, breathtakingly deep economic contraction, with all sorts of scary variables playing out in ways that are yet unknown, the Dow stands at a higher level than it did then. Is the U.S. economy really on a stronger footing than it was 16 months ago? This was the week a lot of “It’s not going to be as bad as we feared” takes appeared in the news, but there is a lot of economic misery yet to come. It feels to me as if the markets are celebrating prematurely.