S&P/ASX 200 Index (ASX: XJO) investors are feeling positive, are they right? There's a lot of economic data that is worrying.
According to ASX 200 futures numbers, the Aussie share market is expected to rise in early trading.
That was despite yesterday's Australian data that showed services and manufacturing numbers had already declined heavily.
Last week another 4.4 million Americans filed for unemployment. That brings the total to 26 million newly unemployed Americans over the past five weeks.
So why is the ASX 200 positive?
Well you'd need to go to each investor and ask why they're buying today. The market is made up of different buyers and sellers, each with different thoughts.
There are some positive signs out there. The number of Americans claiming unemployment each week is declining. Perhaps we've already seen the worst point? However, there could still be a long tail of more unemployed people.
The US just passed another aid bill. This one is for US$484 billion. It is allocated for small businesses, hospitals and wider testing.
In Australia we've seen the infection numbers decrease to only a tiny amount of new cases each day. It seems Australia's lifting of restrictions could come a lot sooner than expected or even hoped.
Thankfully Australia hasn't seen the deaths that other major economies have. If a lot of Australians can get back to work whilst still being safe and cautious, it could mean less of an economic hit than predicted.
But it's probably still going to be painful. And some ASX 200 industries are not likely to bounce back for a while. International tourism could be low for quite a while – hopefully domestic tourism can make up for it.
Foolish takeaway
Share valuations shouldn't just be based on this year's earnings. You need to think about the share's medium-term prospects too. And remember that interest rates are extremely low. At today's prices I think some ASX 200 shares look really good buys.
