Treat with caution: rocketing stocks aren't cause for comfort

davfor

Its helpful to remember this.....

Those pining for a bottom to the gut-wrenching stock market selloff may be disappointed to learn that mega one-day rallies like the historic one witnessed on Tuesday are typically not the start of a durable recovery.

Going by history, those looking to time the end of the bear market should be more encouraged by days when investors take modest bites at risky assets rather than great big mouthfuls.

https://reuters.com/article/us-health-coronavirus-markets-surge/treat-with-caution-rocketing-stocks-arent-cause-for-comfort-idUSKBN21C0JE

Mark

Precisely which is why I've been adding extra weight on my lap to insure that I continue to sit on my hands.

rono

Howdy folks,

Careful with the bailout darlings. They're skyrocketing but look at these industries in the post plague world. This is why no serious person would loan them a dime.

Leisure and travel will be depressed for decades. The boomers et al will be scared to pack themselves into an airplane or cruise ship or casino or sporting arena or convention. After this market collapse, how many can still afford travel? People and particularly businesses are being forced to go virtual and they're gonna love it. Business travel will be greatly depressed. Will some demand exist? Of course. Just not enough to ever be viable.

Watch the mortgage paper and REITs particularly commercial. How much is in brick and mortar or malls? Toilet paper. Hell, plow the malls under and build Drive In theaters. Forget sitdown theaters.

Energy. Good lord what a mess. No demand and a price war. Oh, this also negatively impacts alt fuels, mass transit, etc.

Until we get more clarity, it's be patient and prudent and "keep your asses low and your flak jackets close."

Peace and Flatten the Curve

Rono

Baseball_Fan

...and while you're at it Mr Rono, you might as well add sit down restaurants to your list...

Really tough to see many folks in those segments lose their livelihood but I think many folks are going to realize how much money they have spent eating out at a loud, packed eatery where the food quality is so-so, the service is indifferent and you spend a week's worth of groceries on one meal...and the mark up's on a few drinks is outrageous... and found out, hey I can cook these meals at home at a fifth of the cost...

I think we're going back to the 1960's...folks traveled to their lake house, maybe drove, not flew down to Florida, went camping, grilled out in their backyard, drank a few Schlitz's, only folks who had photos from overseas were in the military, eating out was for special occasions only not couple times a week....and WE FREAKING HAD REAL MANUFACTURING JOBS HERE rather than overseas...come to think of it, a little before my time but I believe most folks had savings accounts, did not own stocks...after all this baloney, I wonder if folks will have had enough of the chicanery of what the so called market is these days....

Good health to all, take care

Baseball Fan

johnN

Past 48 hrs feel similar to scene from Titanic movie, where the the end of ship move up before final dive to the bottom of ocean. Unfortunately many hanging on at ship-end do not make it. The ones that left much earlier on small boats were survivors. Many may argue that previously bailouts do not help market much but may cause more gyrations.

Old_Joe

Quite a graphic word-picture, John. Could have done without that, to be honest. Let's hope not!

johnN

Hi Sir @_Old_Joe, I am always wrong in terms of market timing, hope to stay that way. We are indeed 4-6 weeks behind China, so hopefully by next month, warmer weather at least in Southern States/less virus transmissions, things maybe more Rosy. I read 85% of structures very similar to SARS, may not to do well in warmer weather/viral loads significantly reduced and unable to stay around in hot /sunny surface much longer. Hope this horrific virus go away in few months. Of course few patients with immuno-compromised states may still get problems even in [summer flu]. Hope curve significantly flattened soon.

Interesting article about current market conditions from marketwatch:

Stock market’s historic bounce may signal ‘near-term bottom,’ but remember what happened in 1987 and 2008

https://www.marketwatch.com/story/stock-markets-historic-bounce-may-signal-near-term-bottom-but-a-retest-of-the-low-like-1987-and-2008-is-still-a-possibility-2020-03-25?siteid=yhoof2&yptr=yahoo

Old_Joe

Oh, yes- I remember very well indeed.

Stay well.

Mona

@johnN, I don't know about this warmer weather thing. Panama has daily temperatures in the low 90s excluding the highlands. It is a country of 4 million people. Today, they went to a full day curfew in an attempt to flatten the curve. 440+ cases, up from 345 Monday, and 8 deaths.

Mona

Sven

@davfor, is it the same as dead cat bounce in the last two days?

@Mark, think I will get some adult diapers ? As long as the COVID-19 cases continue to rise, especially New York, the Fed money will do little to calm the market. The unemployment number is coming out soon.

davfor

@Sven My crystal ball is on lock down due to the coronavirus. I will get back to you when its quarantine period is up.

catch22

Damn........crystal ball lock down. About the same here, Magic 8 Ball taken to repair shop (needs a special electronic part I can't order, or would repair myself) and now the shop is closed because it is not an essential business under current guidelines.

Old_Joe

The office of the President of the United States has found that casting chicken bones or using tarot cards works just fine for them. Electronic Magic 8-Balls are an unnecessary high-tech gimmick, and often produce fake news. Only elite scientists use those, and they don't work anyway- look at their fake news prediction that the world is getting warmer!

Charles

@davfor. The Yardeni chart is really good! c