Displaying items by tag: dow

Friday, 27 March 2020 14:25

Beware a Big Stock Reversal

(New York)

Markets have been on an extraordinary run over the last three days. 20%+ for the Dow and a measly 18% for the S&P 500, technically ending the bull market. It was the best three-day run since 1931 (in itself a bleak reference). However, many on the street think this rally was too bullish too fast, as we are arguably not even to the worst of the health crisis, and certainly not in the worst part of the coming economic slowdown.


FINSUM: We are going to have at least two quarters of awful earnings and several months of terrible jobs data, so there is a long way to go. This seems like a stimulus-euphoria/dead-cat bounce rally.

Published in Eq: Total Market
Tuesday, 24 March 2020 12:35

Trump May End the Lockdown in Six Days

(Washington)

President Trump is changing his view on coronavirus. When the virus first started sweeping the world, he maintained a cavalier attitude. He then pivoted to be very focused and concerned about protecting against the virus. Now he is moving back in the other direction, saying that at the end of the current 15-day lockdown, he is considering opening the economy back up, joining a chorus of business leaders who say that the “cure cannot be worse than the virus itself”.


FINSUM: This is a difficult and risky decision—lives or livelihoods? However, Trump proceeds, it seems unlikely New York, California, and Washington, will take his lead.

Published in Eq: Total Market
Monday, 23 March 2020 16:07

The Worst of the Selloff Hasn’t Even Begun

(New York)

Wall Street made a grim prognostication today. The street reminded investors that so far the losses in equities have been modest compared to prior routs. The S&P 500 is down (before today) 32% since its peak. That compares to 57% during the Financial Crisis, and 49% in the Dotcom bubble. Goldman Sachs says the S&P 500 will see a 41% fall from peak to trough, while Bank of America thinks it will be 47%.


FINSUM: It is easy to imagine a couple more weeks of double digit losses before peak case-load hits and markets start to calm down. In our opinion, the rise and eventual decline in US cases will be the switch that turns markets on.

Published in Eq: Total Market
Monday, 09 March 2020 11:08

Trading Halted as Stocks Plummet

(New York)

Markets are off to their worst start in recent memory. With oil having plunged 30% earlier in the day, US markets opened to a very abrupt 7% decline. The sharp plunge triggered an automatic market halt of 15 minutes. At the time of writing, the Dow is down 6.37% and the S&P 500 is down 6.19%. US Bond yields plunged too, with the 10-year Treasury at one point having a 0.43% yield. Janus Henderson summarized the markets best, saying “In just over two weeks, investor sentiment has swung from complacency to panic … What started as a virus-driven de-risking has now mutated into a broad-based, multi-asset capitulation”.


FINSUM: It is looking ever more like global central banks are going to have to step in with coordinated stimulus. That said, a virus is a unique kind of panic that cannot be instantly resolved. A recession now appears more likely than not.

Published in Eq: Total Market
Tuesday, 03 March 2020 15:32

Bernstein Says You Should Buy Stocks Now

(New York)

Storied research firm Bernstein Research has a recommendation for you, and it is a brave one—buy stocks. The firm says that on a tactical buying basis, it is time for investors to re-enter the market. Bernstein acknowledges that they have no idea when the coronavirus situation will clear up, but that given the general decline in indexes and that fact that sentiment has swung negative, it only makes sense to buy because the market has become too bearish.


FINSUM: We have to give Bernstein credit here for a bold call. Most analyst teams tend to hide or vacillate, but this is a strong call.

Published in Eq: Total Market
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