A lot of the arguments are that the stock market valuations don't make sense but digging into the foundation, we now see that the stock market valuations do make a lot of sense due to the huge amount of money that's pouring into the market. So it's not that the valuations are out of proportion but the valuation of the dollar that is going down.
Looking at the Fed repo schedules and charting out the historical, we see that the Feds upped the Repo limit by 10x starting 3/16/20 from $100 Billion to $1000 Billion. While this has reduced to now $500 Billion as of 5/4/20, it is still 5x higher than before March.
Until this repo goes down, the market will continue to go to new highs.
Since the outbreak of COVID-19, the Fed has vastly expanded the scope of its repo operations to funnel cash to money markets. The Fed’s facility makes cash available to the primary dealers in exchange for Treasury and other government-backed securities. Before coronavirus turmoil hit the market, the Fed was offering $100 billion in overnight repo and $20 billion in two-week repo. It ramped up the operations on March 9, offering $175 billion in overnight and $45 billion in two-week repo. Then, on March 12, the Fed announced a huge expansion. It is now on a weekly basis offering repo at much longer terms: $500 billion for one-month repo and $500 billion for three months. On March 17, at least for a time, it also greatly increased overnight repo offered. The Fed said that these liquidity operations aimed to “address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.” In short, the Fed is now willing to loan what is essentially an unlimited amount of money to the markets, and uptake has fallen well below amounts offered.