Data: Federal Reserve; Chart: Axios Visuals

Minutes from June's meeting of Fed policymakers was released on Wednesday and showed the central bank is still ready to provide support "for some time" to markets.

Why it matters: With coronavirus cases rising, recent economic data largely moving backwards, and companies' earnings and revenue guidance slipping, the Fed looks to be the driving force behind the march upwards of stock prices.

By the numbers: From February to the end of June, total assets held by the three major central banks (ECB, Fed, BOJ) soared $5.6 trillion to a record $20.1 trillion — with the Fed now holding over $7 trillion, data from Yardeni Research show.

What they're saying: The Fed is using "financial engineering, in a highly levered manner, to indirectly influence equity prices," Vineer Bhansali, CIO of LongTail Alpha, writes for Forbes.

  • “As long as the Fed has the authority to buy assets, print money, and underwrite risk taking, as it currently has, don’t fight the Fed. But be ready to bail out as soon as they start thinking about thinking about raising rates.”

One level deeper: “Today the economy and the markets are driven by the central banks and the coordination with the central government,” Bridgewater Associates founder Ray Dalio said at the Bloomberg Global Asset Owners Forum Thursday.

  • As a result, “capital markets are not free markets allocating resources in traditional ways.”

The big picture: Value metrics like P/E ratios must be re-evaluated in light of the current situation, Ed Yardeni, president and chief investment strategist of Yardeni Research, writes in a note to clients.

  • "What should the forward P/E of the S&P 500 be when the federal funds rate is zero, the 10-year US Treasury bond yield is below 1.00%, and the Fed is providing plenty of liquidity to facilitate the resulting rebalancing from bonds to stocks?"
  • "Frankly, we don’t know the answer to this question, since there is no precedent for the current situation."

Go deeper

Gold prices pass $2,000 and Bank of America sees $3,000 on the horizon

Illustration: Aïda Amer/Axios

Gold prices closed at a record high, above $2,000 an ounce, on Tuesday and investors are getting even more bullish.

What happened: Bank of America released the summary of a call between its chief investment strategist and heads of its commodities, rates and technical strategy teams Tuesday that concluded gold was very well supported and could rise as high as $3,000 per ounce in the next 18 months.

A quandary for state unemployment agencies

Illustration: Aïda Amer/Axios

State agencies charged with paying unemployment benefits to jobless residents have their backs against the wall as they rush to parse President Trump's executive actions on coronavirus aid.

Why it matters: States are being asked to pitch in $100 per unemployed resident, but it’s a heavy lift for cash-strapped states that are still unclear about the details and may not opt-in at all. It leaves the states and jobless residents in a state of limbo.

Updated 11 mins ago - Health

New Zealand reports first coronavirus community spread for 102 days

Prime Minister Jacinda Ardern after a press conference at Parliament on July 22 in Wellington, New Zealand. Photo: Hagen Hopkins/Getty Images

AUCKLAND, New Zealand — Auckland is locking down and the rest of New Zealand faces lesser restrictions for 72 hours after a family of four tested positive for COVID-19, Prime Minister Jacinda Ardern announced Tuesday.

Why it matters: It's the first cases not in managed isolation for 102 days, Ardern said at a news briefing.