I spent yesterday driving about a couple hours to bring food to my in-laws.
The route was in the Philly /South NJ area, middle of the day and in significant commercial areas.
Nearly everything is closed... strip malls, car dealerships, malls, restaurants.... parking lots that would hold thousands of cars just empty for weeks. And the same story over and over again for miles... Inside I knew this was the case, but actually seeing the closures on such a grand scale was brutal.
For me, this just drove home the local economic impacts and begs the question "how is this not worse?"
(no message)
Death?
which I think we all assume is the case, I am shocked that the markets have not fallen more.
not debating econ vs medicine... observing that this is worse than I was seeing/feeling in my own quarantined bubble.
It is actually hard to borrow SPY (S&P 500 ETF). You have to borrow it to short it, and I have never noticed it being hard to borrow before because so many people usually own it.
So, I wonder if there is this technical situation where so many negative bets have been made that it is actually hard for the market to go down.
But, I agree with you. It seems crazy that we are sitting here a mere 15% below the ALL TIME highs. There has been significant damage to the economy.
a floor has been created. But to your point. only 15% off all time highs just does not make sense?
The roads are empty, nor fuel being bought, no fuel taxes being recovered, no tolls, small restaurants done, nails. barbers. sporting goods, electronics (Best Buy) gyms, sporting goods (Dick's) and the list goes on and on.... everything that you would see in a strip mall.
With all that work and consumption effectively at zero, I am amazed the impact is not greater (or maybe just not greater yet?)
Be safe
I show us at about 84% going into this morning......
Personally we are at about 81%.......I could see strong upside when we get on the other side of this
Assuming we do!
Where are you going to go? Cash? Gold? Bonds? Real estate? Mattress?
Investors are betting on three things:
1. The economy will start a gradual re-opening by the summer.
2. Vaccine within 2 years.
3. The market will be backstopped by the Fed until 1 and 2 happen.
So again, where else are you supposed to park your money?
the cause for the drop was unrelated to economic reasons like other big drops.
Uncharted territory, but they don’t want to miss out on the big run up when we star getting through this which goes with what Chris said....they know this will have a end, they just aren’t quite sure the economy will survive if it takes too long. That’s why we need to act sooner to go back.
That’s my guess anyways.
This point is worth repeating - the health consequences of a sustained shutdown are orders of magnitude worse than the damage done by the Chinese virus.
Let's hope sanity surfaces and we open quickly in an orderly fashion.
(no message)
(no message)
I know the answer is no one really knows, but if I had to choose between the market reaching new highs in 2021 or 2030 I'd bet heavily on 2021.
I expect we'll see the true market impact after the initial results of the "return" or incremental return.
Take a look at oil right now.
(no message)
This net effect of this stimulus package of transferring wealth from the upper middle class to others simply delays the impact of this shutdown, it doesn’t eliminate it.
Kind of like going a a month long vacation, and putting it all on your credit card—it has to be paid for eventually.
or pelosi, whichever is richer.
Short term speculative investors move the market, long term "dollar cost averaging" investors (99+%) buoy it along with the government and fed.