The stock market typically continues to decline sharply for several months during a recession. It historically bottoms out anywhere from 6-12 months after the START of a recession and usually starts to rally before the economy picks back up. The market has not priced in any upcoming recession and then bounced back from it in 1-month - that's just ludicrous! Hell, we just started this recession like yesterday and don't even know how serious it is at this point. What we are seeing are large volatile swings, which is quite common when the economy & market are being negatively affected, from the initial 32% drop in the S&P last month (Mar 2020), what this is telling us, is that the upcoming recession is going to be a very sharp and severe one.
Lastly, the FED has reacted quickly due to this global pandemic, because they know the seriousness of what is coming - approving the largest stimulus package in history: $6.3T. That unfortunately is not going to be enough to even plug the initial March drop that this virus has created. The market alone, lost $13T within a matter of 2 weeks, this is not including the 10's of millions of jobs lost and millions of businesses being closed globally. If you add those in, we are somewhere around a $40T(+) hole.
I am definitely expecting the market to trend down the rest of the year, and we most likely won't see a rebound until 2021 - which is where I will be repositioning my investments to go long. Be careful everyone, and don't be fooled by emotional daily market swings/rallies. Invest wisely..
JP Out
Lastly, the FED has reacted quickly due to this global pandemic, because they know the seriousness of what is coming - approving the largest stimulus package in history: $6.3T. That unfortunately is not going to be enough to even plug the initial March drop that this virus has created. The market alone, lost $13T within a matter of 2 weeks, this is not including the 10's of millions of jobs lost and millions of businesses being closed globally. If you add those in, we are somewhere around a $40T(+) hole.
I am definitely expecting the market to trend down the rest of the year, and we most likely won't see a rebound until 2021 - which is where I will be repositioning my investments to go long. Be careful everyone, and don't be fooled by emotional daily market swings/rallies. Invest wisely..
JP Out
Comment:
Nice move up today. We are now S&P: 60pts away from the .618 fib.