The S&P 500 index rebounded from a 5.9 percent drop mid-month to finish up 1.8 percent in June, continuing the rebound due to the massive injection of liquidity from the Federal Reserve since March. The rising tide of liquidity has levitated everything from oil and gold to penny stocks and even bankrupt companies.
The price of gold approached the $1800 level, which it has not reached since 2011. In May, Hertz rental car company filed for bankruptcy, hurt by ride-sharing businesses such as Uber and Lyft, as well as the virtual shutdown of business travel due to COVID-19. Nevertheless, demand for the bankrupt company’s shares was so strong, a federal bankruptcy judge approved the sale of up to $500 million worth of stock before the Securities and Exchange Commission (SEC) weighed in.
Clearly, these are not normal times.