The Briefing Room
General Category => Economy/Business => Topic started by: catfish1957 on May 06, 2020, 11:09:51 am
-
(https://image.shutterstock.com/image-photo/image-150nw-224751073.jpg)
Of course the worst of it is, the huge debt load being added by our government, which a last glance is in the neighborhood of additonal $3-5T
Still, the numbers since the low of the crash (March 23rd), have seem what may be some long term optmism. Still remember, we still may have not seen the bottom. There will be a lot of earnings reports that I think will put some occasional jolts in especiallly in the equity markerts. Here is the tale of the tape... (6 week period- March 23rd vs, this morning's opening May 6th)
DJIA 18313...... 23,883 Up 31.1%
NASDAQ- 6631... 8,809 Up 32.8%
S&P 500- 2191.. 2,891 Up 31.9%
Gold- $1581 $1,706. Up 7.9%
Oil- $23.36/bbl. $24.46. (nice recovery and some decent stabilzation since the April 20th commodity anomaly)
And VIX? Remember in March and April, when it seemed it was permanently parked between 70 and 80? It's been rocking along in the 30's for about 2 weeks now. Hope we can put our whiplash braces away for awhile
Forward issues toward recovery?
(1) Self inflicted added national debt, which is now tabbed at somewhere between $3-5T. This is worrisome, and can have long term damage and lasting effects on future prosperity.
(2) Concern is still huge around COVID-19 related supply chain disruptions. Our modern economy is so specialized, that it is basically can grind to halt with one or two simple weak links in the chain. Dominoing effect is terrible for market
(3) Continued trend toward opening up America. Quarantine in place perpetually is a "suicide" solution, as far I am concerned. Obviously, we need to make common sense decisons, to keep critical infrastructure and the vunerable safe. But continued shutdown is not sustainable. I suspect political motivation for some decision making in this area, but that is a discussion for another area of this forum.
(4) I still believe that there are going to be some market jolts as earnings reports roll in through 2 and 3Q. How well the markets roll with the bad news will really determine if this is pretty much a Macro Market Flash Crash, or a true '30's type economic pain fest. Right now? I think there is about a 60-65% chance that March 23rd was the bottom. IMO , that number may go well bellow 50% if Biden gets elected in November. A Biden presidency will create an American economy of perpetual government stimilus where we will see debt soar. And worst case... killing the $ as reference currency, mass inflation, devaluation of currency.
(5) COVID-19 containment. And the obvious.... Case/death numbers will impact market. The quicker this thing subsides, the better the economy will respond.
Happy Investing........
-
(https://image.shutterstock.com/image-photo/image-150nw-224751073.jpg)
Another bit of good news today for those who qualify....
IRS has waived RMD for 2020.
https://www.forbes.com/sites/deniseappleby/2020/04/13/the-top-8-must-know-rules-for-covid-19-rmd-waivers-under-the-cares-act/#663f2052d2c8 (https://www.forbes.com/sites/deniseappleby/2020/04/13/the-top-8-must-know-rules-for-covid-19-rmd-waivers-under-the-cares-act/#663f2052d2c8)
-
The stock market was way overbought anyway before the virus scare.
We have bounced back not far from where we would have been in the first place.
Now we see how resilent the economy is, as capitalist ones tend to be.
-
The stock market was way overbought anyway before the virus scare.
We have bounced back not far from where we would have been in the first place.
Now we see how resilent the economy is, as capitalist ones tend to be.
Agree . No where near the bargains there were a month ago. One sector that is kind of peaking my interest right now is airlines. Totally extra bad news lately on top of prior COVID..... No international flights unitl 2021, Buffett/ BRKA sell off, negative earnings upcoming. Who knows might not survive. BUT... the ones that do survive, are going to have killer returns with less competion.