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Stock Market 2020

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Japan forecasting some pretty dire Q2 data. Nikkei closed up 1.3%. It’s less than 4% off peak. Hmm...
 
Darth Vader said:
Don't hold your breath for a vaccine. Back in 1984 it was said that we'd have a vaccine for the HIV virus in around 18 months - that was 36 years ago.

Cheers,

DV
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I saw some poor Cambridge or Oxford researcher lad on Ch4 news the other day getting brow beaten by the interviewer to give an idea of when a vaccine might be ready...he said Sept...WTF is he talking about...

Anyway even the news of it would make the stock market explode with glee
 
No one can guarantee at this point whether a vaccine to innovate against COVID-19 will be effective, but I've never seen such a rush towards finding one. Ten vaccines against SARS-CoV-2 are already at the clinical trial phase, with phase 3 data from the University of Oxford trial likely to be available this summer.

https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31252-6/fulltext

Although many infectious disease experts argue that even 18 months for a first vaccine is an incredibly aggressive schedule, a few optimists believe that hundreds of millions of doses of vaccine might be ready for roll-out by the end of 2020.

“What's happened so far has been nothing short of amazing”, says Penny Heaton, a vaccinologist and chief executive officer (CEO) of the Bill & Melinda Gates Medical Research Institute. Previous investments in new vaccine technology platforms made this possible, she adds.
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Joe
 
Joe, I am also following the vaccine news and so far I think it's looking pretty good. Reasons to be cautiously optimistic in these rather pessimistic times.

However I think the stock market is now completely decoupled from economic reality.
 
Sean,

sean99 said:
Joe, I am also following the vaccine news and so far I think it's looking pretty good. Reasons to be cautiously optimistic in these rather pessimistic times.
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Me, too. Even partial protection would be great. A vaccine that provides enough protection so that you'd be less likely to get COVID-19 if you're exposed to SARS-CoV-2 or less likely to have severe symptoms if you do got COVID-19 would be good news.


However I think the stock market is now completely decoupled from economic reality.
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It does seem that way. If I weren't a vegetarian, I'd be inclined to put my cabbage in pork bellies. Obviously, I'm OK to invest in wheat and frozen concentrated orange juice, but I'm not a savvy investor like them Duke brothers.

Joe
 
The whole economy and stock market situation is so confusing I was watching one of my favourite commentators and they made the simple point...

The only definite thing is that all this monetary stimulus is TEMPORARY....globally...

You have to crystal ball and imagine what it will be like this autumn.

ECB has thrown 600 billion into the ring. They actually need more like 10 times that to sort bank solvency issues starting with Italy.
 
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Snufkin said:
This article from the New York Times is interesting if not a little worrying:
https://www.nytimes.com/2020/06/06/upshot/coronavirus-economic-crisis.html?utm_source=pocket-newtab
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On the unemployment front you need to get granular.

Front my small personal sample pool, I know of a few that have lost their jobs but critically a few that have received paycuts of circa 20%...but they are still employed so stats show there's nothing to see here..

There are a few that are not secure in their jobs even if they've retained it.

It's why saving rates have increased and central banks hate that trend when interest rates are near zero.

My niece works at a childcare centre that is meant to try to open with only one third as many children. Owner says there's no point.
 
This is worth a watch. Best quote from it:

"If you look back at history...the stock market always hurts as many retail investors as possible...it will do just enough to lure them in to create maximum pain".

 
Plenty of FT.com articles last couple of days about why the US market is spiralling up. Two key take-aways for me are (i) the lack of alternative investment choices and (ii) the impact of Fed money printing going into inflate US stock prices via bored homebound Gen Zs and Millennials starting to using free-to-trade robinhood app (and similar platforms). Hertz and other Chapter 11 protected stocks have shot through the roof with new retail "investors" not realising what they are paying for could well to be soon taken off their hands by a long line of creditors. Often I skim the article to enjoy the comments - usually you get a better class of comments in the FT compared to other rags. Lots of commenters on FT trying to figure out what (not if) will cause the inevitable correction (doubted by some who scream "never bet against the Fed"). Of these, one comment stood out for me. The lack of actual commerce and wealth creation from manufacturing and service in the real economy will reveal itself (in the coming company quarterly results reporting) in hugely inflated P/E ratios, especially when the "E" is tending towards zero. Then the "smart money" (they include algorithm trading in that) will "flee for the hills" and the next correction will occur. This is not expected to be as bad as the previous by some commenters as still there is nowhere really for run to for many people and they will hold on and wait the next inflexion point which will be keenly anticipated.
 
The world went into this economic shock with everything priced for blue skies forever after a decade of excess leverage.

That little issue hasn't really been fixed yet, particularly in the US markets. Alot of excess was removed over about 6 weeks but most of it has just loaded back on.

I really wonder if the new investors have worked out the risk/reward ratio of what they're doing.

I think there's a much higher chance of falls than further gains so I'm staying mostly 'out'
 
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davidsrsb said:
Retail investors and advisors main purpose has always been to provide a way for institutional investors to cash out
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Well the retail investors are potentially giving institutional investors two amazing shorting opportunities in the same year....

Anyway, I'm one of those retail investors so what can I say. I do try to look at the bigger picture though and will enter the market for the long term when I think I'm ready
 
The market left to its own devices caused bubbles so the govts took over and they are now stuck in a deep hole. It's not the fault of retail investors or anyone else trying to cash in. When there is helicopter money, who can blame people for cashing in? if you think about social inequalities, the stock market levels etc... it all started from the distortion of risk premia from yield curve control and quantitative easing.
 
I'm not blaming retail investors as such (Hell, I am one haha). It's just that we are pawns in the game here.

I think the whole game was up in Sept 2019 when the secondary banking (Repo) system went nuts for a few days. Covid has just accelerated this whole cycle and actually forced them to act faster and harder with stimulus (maybe overreact?) so it's now distorted the market more.

I'm definitely not ready to bet my retirement on it anyway...
 
NASDAQ smashed past 10,000 today. It's previous high in Feb was 9,700 and it was on the rip even before COVID.

Nothing to see here...
 
The US tech company I was working for back in 2000 went from over $100 down to $3. That was a massive overswing in both directions, but even so...
 
Ponty said:
The US tech company I was working for back in 2000 went from over $100 down to $3. That was a massive overswing in both directions, but even so...
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That was probably one of the tech stocks my mate in Oz was holding in 1999...and held until 2000...ouch
 
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