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Markets still falling like whoa


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4 hours ago, ChiTownDoc said:

I'm thinking dipping back to 2400 is pretty much a guarantee and I'd bet on 2250 neighborhood.  But with this run and actual COVID numbers beginning to plateau in NYC the bottom may not get below 2100 which was a very real possibility just a couple weeks ago.  

People don't seem to understand once the shelter at home orders are lifted we still have a LONG ways to go.  Restaurants will likely be at 25%-50% capacity.  Airlines will be very limited.  Those industries don't have the best margins anyway so many will still be losing money or refuse to open - unless forced, like airlines. 

No large sporting events with crowds. College football or NFL game days are a whole economy themselves in the cities where they are hosted...many companies have shed decades of fat very quickly.  They'll learn to operate more efficiently when they return...who is to say some of these jobs ever comeback?  That may sounds like a doomsday scenario but it's all very realistic imo. 

Right.  It's what Gottlieb or one of the other folks I follow that really seem sharp pegged as the 80% economy.  Forget the lifting of govt restrictions, from a consumer behavior standpoint, people aren't going to go out and eat at restaurants, go on vacations, concerts, schedule conferences, etc. until they feel 'safe'. At least not at anything resembling the prior level.  And even though I think likely all data is going to show we have flattened the curve significantly in most locations by the end of April, it doesn't seem likely at all we will have any widespread antibody testing or rapid response testing (with contact tracing) in place and ready to go.  So we'll be sitting in no mans land where the data is telling us to loosen restrictions but we'll be flying blind and risk a rapid ramp up within weeks if we do.  Seems like there is still a lot of downside.  And only way this ends prematurely prior to a vaccine is extremely successful therapeutic that can be mass produced or antibody testing demonstrating multiples more asymptomatic than we think and thus massively driving down CFR.  I'm not banking on either so continuing to sit tight in cash for now.

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30 minutes ago, LTtxfan said:

Any recent numbers on amount of money still on the sidelines??

As more positive stuff comes out on Virus, and if FED keeps brrrrrring out more cash, FOMO may cause another 10-15% short term run up in the market soon... 

The brrrrrrrr isn't going to stop anytime soon.

 

however, that's already priced into the market

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8 hours ago, jdhorn92 said:

Please tell me you're close to retirement age.  If you are under 50 or even a little older there is no reason to go to cash in your 401(K), ever. 

I'm 53 and planning on full retirement in about 5 years.  I'm all cash.  And I've realized I'll probably stay in that.  Before all this shit, most of my money was in VTTVX (or similar).  Now, it would be stupid of me to take a big position in the stock market with such a short investment horizon, and it would be stupider to buy bonds, because I can't see them doing anything but getting killed by inflation.  

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A quick exit would be a his­tor­i­cal anom­aly. Many econ­o­mists are gird­ing for a re­ces­sion as the pan­demic has shut down busi-nesses around the world and left many job­less. Bear mar­kets that are ac­com­pa­nied by an eco­nomic re­ces­sion tend to be more pro-longed and last about 11 months, ac­cord­ing to Bank of Amer­ica an­a­lysts. The U.S. stock mar­ket has never reached its bot­tom in less than six months af­ter fall­ing more than 30% and fac­ing a re­ces­sion.

“His­tor­i­cal analogs sug­gest the [s&P 500] could rally to close to 3000, but still roll over and touch new lows be­fore stag­ing a full-fledged re­cov­ery,” wrote Bank of Amer­ica an­a­lysts in a re­search note. “We think it’s in­stead more likely that we haven’t seen the bot­tom in eq­ui­ties yet.”

Other re­cent ral­lies point to a sim­i­lar out­come. The bank an­a­lyzed 26 three-day ral­lies in U.S. stocks that topped 10%. Of those, 20 were fol­lowed by a fall to a fresh low in the stock mar­ket.

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I'll just leave this here.  The risk to the commercial real estate market is being wildly underestimated, especially on the retail front.  Malls are going to take it up the ass after the Gap's and the J Crew's of the world bust out along with middle tier restaurants.  Consumer spending is also being wildly overestimated (post "re-opening").  People aren't paying rent so they're sure as fuck not going to Disney and Slobster.

Nearly a third of U.S. apartment renters didn’t pay any of their April rent during the first week of the month, according to new data to be released Wednesday by the National Multifamily Housing Council and a consortium of real-estate data providers.

The data come from 13.4 million rental apartments analyzed by several real-estate data firms, including RealPage, Yardi and Entrata. The properties included are considered investment grade with a tenant base that may skew higher-income than the median renter. The data don’t include single-family homes, and the apartments counted exclude public housing and other subsidized affordable housing.

https://www.wsj.com/articles/nearly-a-third-of-u-s-renters-didnt-pay-april-rent-11586340000?mod=hp_lead_pos13

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Since I've been working from home the past month, I've had CNBC on while I'm working and I'm laughing about how accurate that is.  One guy that fits that says the market has hit bottom. Very next guy says the opposite.  They all work for place with names like "New Horizon Capital."  (I don't know if that's a real place.  I just made it up.)

Another subplot is how good/bad a lot of them are at interviewing from home.  David Faber owns the humble brag on that.  The rest, not so much?

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I've started to think that people, including some professionals in the investment community, think that seeing the peak in virus numbers (cases, ICU, deaths) means that the economy is about to restart. I don't think they recognize the damage that has been done; Fed/Treasury printing money, 0% interest rates, slow ramp up of employment (restaurants, schools, etc) and consumer spending. And that there is a chance of the 2nd wave of COVID cases (my educated opinion on this has this pegged to roughly somewhere between a 16.4% - 89.7% probability). 
Also, there is still an unsettled oil production dispute led by Saudi vs. Russia, this has spilled over into a price collapse in ethanol and therefore corn prices; dominos will continue to fall.

tl:dr  - shit will still hit the fan, but it is likely already priced into the market (unless it isn't)

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14 hours ago, Beau Vine said:

I'm 53 and planning on full retirement in about 5 years.  I'm all cash.  And I've realized I'll probably stay in that.  Before all this shit, most of my money was in VTTVX (or similar).  Now, it would be stupid of me to take a big position in the stock market with such a short investment horizon, and it would be stupider to buy bonds, because I can't see them doing anything but getting killed by inflation.  

I appreciate your position;  you got me by three years, though I imagine I'll work longer than you before retirement.  God willing, I can see myself going to 65, so I have another 15 years.  The old rule of thumb was age minus 100 to be in the right balance. With people living longer and the sheer number of additional vehicles available, I'm not so sure that holds water anymore.

Good luck with your plan, at the end of the day, we all have our own preferences and set of ethos to follow.  I just don't know if 2% compounded over the next decade (albeit safe) is enough return; there is certainly principle risk being in the market, but i have to believe over time it's the right place for me.  The big variables we aren't sharing of course is how much has been accumulated and what the necessary pile of cash needed to sustain the lifestyle desired. To each his own.

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1 hour ago, jdhorn92 said:

I appreciate your position;  you got me by three years, though I imagine I'll work longer than you before retirement.  God willing, I can see myself going to 65, so I have another 15 years.  The old rule of thumb was age minus 100 to be in the right balance. With people living longer and the sheer number of additional vehicles available, I'm not so sure that holds water anymore.

Good luck with your plan, at the end of the day, we all have our own preferences and set of ethos to follow.  I just don't know if 2% compounded over the next decade (albeit safe) is enough return; there is certainly principle risk being in the market, but i have to believe over time it's the right place for me.  The big variables we aren't sharing of course is how much has been accumulated and what the necessary pile of cash needed to sustain the lifestyle desired. To each his own.

It's less than I want, but I think I have enough to retire right now if I wanted to.  And the wife says she wants to work 10 more years, too.

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17 hours ago, LTtxfan said:

Any recent numbers on amount of money still on the sidelines??

As more positive stuff comes out on Virus, and if FED keeps brrrrrring out more cash, FOMO may cause another 10-15% short term run up in the market soon... 

 

Think might b a little too much optimism and FOMO today...

Really interested in tomorrow's trading action leading into a 3-day weekend for "The Market"...

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1 hour ago, LTtxfan said:

 

Think might b a little too much optimism and FOMO today...

Really interested in tomorrow's trading action leading into a 3-day weekend for "The Market"...

Yep this is ridiculous. I have never seen this much sunshine pumping outside of an Aggy tailgate and how we all know how those usually turn out for them.....

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51 minutes ago, Chapo said:

Yep this is ridiculous. I have never seen this much sunshine pumping outside of an Aggy tailgate and how we all know how those usually turn out for them.....

I figured you’d talk about the authorities celebrating your imprisonment, but they’re al mismo 

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Initial jobless claims go up another 6.6MM, last week's figures revised up another 219K so of course futures skyrocket on the news. 

Who knew less people working was so good for the market?  Hell, let me put all my cash in the market and you can lay me off tomorrow.

Edited by Fudge Nuggets
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5 minutes ago, McCroskey said:

Weekly jobless claim estimates expected to be around 5.25MM, and actual turns out to be 6.6MM.

Stock futures sharply turn towards the positive on this news.


Sent from my iPhone using Tapatalk

It’s about the fed injection of cash.

 

Brrrrrrrrrrrrrrrr!

 

Cash machine baby!

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I mean, I don’t disagree with the move by the fed.

While I don’t know how they can legally buy municipal debt, it’s smart and will be necessary.

The fact that they announce it the same day as the unemployment #s is so blatantly political to try and keep a sell off before Easter’s long weekend.

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1 minute ago, Dnaguy said:

I mean, I don’t disagree with the move by the fed.

While I don’t know how they can legally buy municipal debt, it’s smart and will be necessary.

The fact that they announce it the same day as the unemployment #s is so blatantly political to try and keep a sell off before Easter’s long weekend.

It’s not so much political as it is fulfilling their actual role as lender of last resort. 

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6 minutes ago, Dnaguy said:

I mean, I don’t disagree with the move by the fed.

While I don’t know how they can legally buy municipal debt, it’s smart and will be necessary.

The fact that they announce it the same day as the unemployment #s is so blatantly political to try and keep a sell off before Easter’s long weekend.

It’s blatant but I don’t see it as political.  They’re trying to manipulate the market.  Stopping a depression makes sense, but coaxing another bull run out of this bullshit seems irresponsible.  

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2 minutes ago, ChiTownDoc said:

It’s blatant but I don’t see it as political.  They’re trying to manipulate the market.  Stopping a depression makes sense, but coaxing another bull run out of this bullshit seems irresponsible.  

Ok. This is stating it better.

Maybe I’m showing my ass / my leanings by tying a bullish market to politics.

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4 minutes ago, ChiTownDoc said:

It’s blatant but I don’t see it as political.  They’re trying to manipulate the market.  Stopping a depression makes sense, but coaxing another bull run out of this bullshit seems irresponsible.  

I don’t really think they’re coaxing a bull-run either. I think the FED’s efforts are merely keeping the economy afloat, and I’m not sure the $5tn or so that we’re on now is enough to do it.  

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6 minutes ago, ChiTownDoc said:

It’s blatant but I don’t see it as political.  They’re trying to manipulate the market.  Stopping a depression makes sense, but coaxing another bull run out of this bullshit seems irresponsible.  

Trying to coax another bull market is the epitome of political in an election year.

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4 minutes ago, Nice Guy Eddie said:

You don't need to actually improve the economy when you can create money out of thin air and push it into the financial markets. 

It's worked since 2009, why change strategies now?

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