Is this the most hated stock market rally ever?

The stock market is a funny old beast. In the space of less than 6 weeks the S&P fell 34% from its all-time high on February 19th to its lows on March 23rd. Not only were people panicking about their health and their jobs, but also their finances, as many people saw their pensions and savings plummet before them.

Fast forward 12 weeks and the S&P has not only risen by more than 40% since the lows on March 23rd, but is back to where it started the year. And the Nasdaq is now at an all-time high. Many across America are breathing a huge sigh of relief as their wealth returns to levels it was just 4 months ago and company valuations recover. So why is it then that so many market analysts and investors are hating the market's comeback?

Firstly, people just don't trust it, and it is understandable to see why. There are a plethora of issues facing the US economy that weren't there 4 months ago. Unemployment is now at levels not seen since the great depression, 400,000 lives across the globe have been lost to Covid-19, there is social unrest across a number of states following the killing of George Floyd. Even US-China tensions have increased from what they were.

Then there is the FOMO factor - The Fear Of Missing Out. There were many calls from strategists in the last 6 weeks, including Goldman Sachs, who have been predicting the market to retreat and that the rally was overdone. As a result, many have been sitting on the sidelines and missed out on the greatest 50-day rally ever in the S&P.

Even the ethics of the market have been called into question and this falls into two categories, the first of which is that of wealth inequality. Those who have been able to re-enter the market and 'buy the dip' are those with greater disposable income, and are associated with professional services industries where job losses have been far fewer than those in less well-paid jobs. As a result, there are those arguing the market is enabling the rich to become richer and the inequality gap to increase further.

The market's ethics have then been further criticised as it rallied in the face of social unrest across the US and much of the globe as protests broke out for racial equality. The market may not be a person, or have feelings, but it has certainly has been painted as a Wall Street villain with no empathy or respect for what is going on in Main Street.

Almost as if responding to the criticism, Friday's job report then smashed expectations to the upside, showing there were in fact 2.5 million jobs added in May, fuelling further gains for the market and suggesting the recovery really is accelerating faster than we ever imagined.

Love or hate the market, it has shown unbelievable resiliency, but one gets the feeling it may be more delicate now than ever. With the protests raising further questions as to whether a spike in cases of Covi-19 could now be on the horizon, and just 5 months from the Presidential election, there is still time yet for those calling on a reversal to get their way.