It looks like the US stock market might have finally woken up to the fact that Covid-19 isn't going to "go away real soon" and that simply ignoring it and refusing the "shutter the economy" doesn't mean that life can go on as normal (with minimal economic impact). The reality is that if you enforce strict lock-downs and close high risk businesses when there is a surge in cases, you get an immediate economic hit, but you have a chance to get the spread under control and loosen the controls within a few weeks (or months). But if you let "business as usual" continue during a surge in Covid-19 cases, the health situation will eventually become so dire (with hospitals reaching capacity and deaths increasing rapidly) that people decide for themselves to stay home and "shelter in place". The end result is still a big hit to economic activity, but you get their with an out-of-control pandemic and it takes a lot longer to get things under control.
It looks like the US stock market has woken up to this reality and realized that an effective vaccine might still be months away, and even then it will take many more months for enough people to get vaccinated for the pandemic to be brought under control. So the US economy is likely to suffer for a prolonged period (no "V-shaped recovery") which makes the stock market performance since March "irrational".
The ASX200 is currently down by about 11% compared to the start of 2020, whereas the S&P500 is currently about 5% higher. The Australian market usually goes down where there is significant weakness in the US stock market, so we may see a good buying opportunity in the Australian stock market in coming months if the US market finally 'capitulates' to the pandemic's economic impact.
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