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Running on "hopium": Wall Street's lingo for a market rally

Video Credit: Reuters Studio - Duration: 01:40s - Published
Running on 'hopium': Wall Street's lingo for a market rally

Running on "hopium": Wall Street's lingo for a market rally

From FOMO to FOMU to FOGO to BEACH, the financial industry has its own jargon to explain why markets have shot up since March.

This report produced by Zachary Goelman.

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As the novel coronavirus wreaks havoc on the global economy and financial markets, traders are turning to a new lingo to navigate an era of stunning rallies.

For example: "Hopium," to describe an almost euphoric optimism that the U.S. will see a rapid economic recovery.

Several indicators, including the Conference Board's consumer confidence survey, suggest increasingly rosy hopes for a rebound.

But then there are the F-words: FOMO, or fear or missing out, to describe mom-and-pop investors buying into - and driving - stock market rallies, worried that they will miss the upside if they sit on the sidelines.

Closely tied to that, is FOMU - or fear of massive underperformance.

This is how some explain a rush into high-risk corporate bonds when the rise in more conservative investments appeared to lag.

Don't forget FOGO - fear of going out.

That's seen as driving consumer spending on things people need to hunker down, from Peloton bikes to video conferencing and streaming services.

With Americans stuck inside, that sector may continue to surge.

Investors also talk about TINA, short for, 'there is no alternative.'

Stocks might seem overvalued, but with shrinking bond yields they may appear the only good option Then there's BEACH, meaning both where people were wary to go and the industries that get them there.

Bookings, energy, airlines, cruises, and hospitality have all rebounded sharply on expectations they will be well-positioned to sop up pent up-demand for vacation.

And lastly, there's the old Wall Street slogan, "don't fight the fed." When the U.S. central bank signals it will keep interest rates low as it buys up trillions in bonds, investors bet that the liquidity will continue to fuel an upward market trend.




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