In market terms, think of the coronavirus sell-off as a three-legged stool where if one of the legs isn't firmly attached, the whole thing will tip over.
The first leg is monetary policy, and that comes in the form of rock-bottom interest rates and a slew of programs aimed at keeping the markets functioning properly and funneling money to businesses and individuals who need it. That is well in place thanks to the Federal Reserve's action over the course of the last two weeks.
The second is fiscal policy, or the dollars that will be directed specifically to needy areas, the unemployed and businesses that have been displaced by the way the coronavirus has seized the national economy and brought key industries to a virtual standstill. There finally are signs that this leg soon will be nailed down.
The final, and most important, part of the stool, though, remains in the workshop. That's some kind of assurance that the virus has been contained, that the caseload and mortality rate at least plateaus and gives an indication that some sense of normalcy can be restored.
Until that happens, rallies like the 10% violent upswing in the Dow on Tuesday will come and go.
"At some point, we're going to see a decoupling from the health-care headlines and the financial headlines," Peter Mallouk, chief investment officer of Creative Planning, said during a market panel discussion Tuesday. "It's just a question of getting here to there and how painful it's going to be from a health-care perspective and a fear perspective."
There's been plenty of fear lately as a stock market that had been thriving just a month ago has suddenly wiped out a couple years' worth of gains. Investors worried about prolonged economic paralysis have been trying to sell anything they can, creating a glut across markets that buyers have been loathe to absorb.
The Fed has unloaded almost all of its policy ammunition and then some, dusting off its financial crisis playbook and then adding some measures unique to this crisis. Market participants say they've appreciated the central bank's efforts, but the selling has continued regardless.
As Congress gets closer to a stimulus package that should be worth at least $2 trillion, that also will help assuage jangled nerves, and contributed to the Tuesday rally.
None of those measures taken to attach those two legs to the stool will matter, though, without a clear path to daylight on the health-care side.
"We're going to need to see Fed policy stop the bleeding in market functioning. We're going to need to see Congress pass some legislation. We're going to have to appreciate the bad news that we are getting is just temporary. Then we're going to need to have to see the infections pass an inflection point," said Vincent Reinhart, chief economist at BNY Mellon Asset Management.
"Even if we had perfect policymakers, and I don't think we have perfect policymakers, as long as we're unsure of the track of the virus, nobody will be willing to make long-term commitments," he added. "Everyone will be sheltered in place."
Indeed, Reinhart adds a fourth leg to that coronavirus stool that investors need — a willingness to absorb a spate of ugly economic news, perhaps the worst the country has seen since the Great Depression.
Weekly jobless claims, for instance, are forecast to hit 1.5 million when that number comes out Thursday, according to economists surveyed by Dow Jones. The number could be double that if some Wall Street predictions are true. Also, St. Louis Fed President James Bullard said this week that the short-term unemployment rate could hit 30%, which actually would be worse than the Depression.
There will be myriad other bad reports coming off the national shutdown, including a GDP drop that could be 20% or worse, according to some estimates.
Nonetheless, investors will need to be convinced that the plunges are self-induced and temporary.
"If fiscal policy kicks in, if the Federal Reserve facilities help maintain market functioning and if the infection follows a 'V' by sometime next quarter, that really should be the only horrific quarter," Reinhart said. "Then we bounce back in the third quarter and pretty strongly in the fourth quarter, because we will have a lot of fiscal and monetary stimulus in place."
JJ Kinahan, chief market strategist at TD Ameritrade, is a little more cautious.
He said his clients are tiring of the daily whipsaw moves in the market, and he'd like to see the major indexes such as the S&P 500 find some kind of trading range. Markets, he added, could be getting ahead of themselves by assuming a big help from Congress.
"We need to get the fiscal policy out the door first," Kinahan said. "We keep hearing they're at the 2-yard-line. Let's not count to six until somebody gets in the end zone."
From a health-care perspective, Kinahan said he actually is watching Europe more closely.
Italy has been particularly hard-hit, and like the U.S., much of Europe has been forced to stay indoors and is seeing commerce brought to a near standstill. There is some evidence that the caseload there is beginning to plateau.
"The thing that's really going to help us get back to stabilization and the upside more long term is when any country in Europe goes back to work," he said. "It doesn't have to be Italy, just anybody in Europe. That's going to be a real key point for the U.S., because we tend to be 2½ weeks behind Europe."
One good thing is that his clients aren't panicking. In fact, he said they're looking to nibble in certain areas like bank stocks and chips while avoiding restaurants and the hotel industry.
"People aren't completely freaked out. I think people are very upset at the damage done to their 401(k)s." Kinahan said. "But the overall message we're getting is we hope this day-to-day flailing of the market stops, but there sure seems to be opportunity."