Just how far can Covid 19 drive down the markets?
Discussion
Someone posted a chart back in March of sp500 correlated to cases in Italy. I wonder if we will similar correlations with cases or (hospitalisations perhaps) in USA or if we are past this stage, in market terms at least.
Map is turning a little red.
Map is turning a little red.
Edited by tattarrattat on Sunday 14th June 09:49
Interesting comments about China.
I spent a month in China in 2016 travelling around and have read a lot since.
The pace of development is unbelievable they build through the night. The saddest parts were the fact they really don’t care for sick homeless or elderly etc. They consume so much don’t really care about the resources of the world. Look at the expansion into Africa!!! As a business/machine they are amazing. Drain on society don’t care, if you’re not contributing they don’t want to know. They also don’t really care what other countries do. Business is business we don’t care what you do to your people in your country we just want xyz and can offer you this.
I met a couple in a local park who wanted to practice their English. They couldn’t believe I had quit my job to go travelling. Both were in finance and work 6 days a week. They have 10 days off a year in which they can leave the country if they wish but it’s not always granted. Brutal
Facebook didn’t work when I was there. Google maps was completely different. You can’t read up about Tiananmen Square.
Still such a closed country.
Military wise they are building fast but they have a problem and that’s experience. Britain had its empire through a strong Navy. The US Navy is massive and is in every part of the world. China are churning out subs, battle ships etc so quickly but they don’t have the officers or the skills yet.
My prediction is 20 years and things could start getting really ugly especially once they have the naval experience and fire power.
Ground troops wise why are they building fast rail? Yes rail can be bombed but you can also transport a huge amount of troops at a time by rail anywhere in the country if needed and further.
Was COVID created by them? Who knows. I’m on the fence on that question, but one thing is for sure. They can lockdown better than us they don’t have freedom of speech to stop that.
My 2p
I spent a month in China in 2016 travelling around and have read a lot since.
The pace of development is unbelievable they build through the night. The saddest parts were the fact they really don’t care for sick homeless or elderly etc. They consume so much don’t really care about the resources of the world. Look at the expansion into Africa!!! As a business/machine they are amazing. Drain on society don’t care, if you’re not contributing they don’t want to know. They also don’t really care what other countries do. Business is business we don’t care what you do to your people in your country we just want xyz and can offer you this.
I met a couple in a local park who wanted to practice their English. They couldn’t believe I had quit my job to go travelling. Both were in finance and work 6 days a week. They have 10 days off a year in which they can leave the country if they wish but it’s not always granted. Brutal
Facebook didn’t work when I was there. Google maps was completely different. You can’t read up about Tiananmen Square.
Still such a closed country.
Military wise they are building fast but they have a problem and that’s experience. Britain had its empire through a strong Navy. The US Navy is massive and is in every part of the world. China are churning out subs, battle ships etc so quickly but they don’t have the officers or the skills yet.
My prediction is 20 years and things could start getting really ugly especially once they have the naval experience and fire power.
Ground troops wise why are they building fast rail? Yes rail can be bombed but you can also transport a huge amount of troops at a time by rail anywhere in the country if needed and further.
Was COVID created by them? Who knows. I’m on the fence on that question, but one thing is for sure. They can lockdown better than us they don’t have freedom of speech to stop that.
My 2p
Yup. I’ve been pointing out for years on the EV threads that China owns the supply chain for critical materials.
The US has lost South America to China. They control the Li and other key minerals and while the US has been slapping sanctions on Venezuela trying to bully it they have fallen happily into China’s arms. Australia is almost cut off from the West now by Chinese business. And Africa was by China twenty years. While Europe and the US complained about dictators being nasty, people funnelling money into Swiss bank accounts and trying to stop genocides and endangered species, the Chinese arrived, flooded the continent with roads, money, specialist labour and have been harvesting it for two decades.
Personally, I don’t think we should be promoting full EVs in the West until we have a credible energy storage solution that isn’t controlled by China and also doesn’t require massive taxpayer funding to be competitive. It seems more logical to limit the requirement to Li batteries and also limit the demand on imported fossil fuels by combining the two correctly.
But not wanting to divert a live thread too badly, I think the most immediate impacts on our markets will be the inevitable second waves. We knew rioting would happen, that was inevitable, we just didn’t know what the catalyst would be. It is certainly a shame that a disease which brought everyone together is now seeing that pulled apart by political extremists and their self serving minority agendas of power and subjugation of the masses. We knew there would be massive stimulus packages that would distort the markets. But we also knew there would be second waves of C19 but what we don’t yet know is how the West will react.
The absolute worst thing for the West at the moment is the mess in the US and that it is election time. There is no strong leadership and worse it is a leadership that is divisive and has turned Americans against Americans and torn the wounds wider open than in a long time and at the worst possible time.
The markets need a stable political front in the US for them to be stable and right now the markets are looking a weird old, confused trustafarian who has never needed his dad more to fix what he can never comprehend and is just lashing out wildly. While on the other side you have another old man that few modern Americans can relate to or like.
With second waves and US political instability at the same time I’m guessing we can expect some choppy times as the market participants try to guess if these are going to trigger a major sell down to previous lows and beyond. I do feel that all rests upon how major countries now react to the second, third and fourth waves although arguably, the correct response to the second wave will remove concerns over all others. Do we go back in lockdown as a single community or do we put those who represent the greatest risk to the NHS into lockdown to allow everyone else to press on with the new normal. If you don’t 100% believe that the C19 virus will be totally eradicated and not return then I’m pretty sure logic dictates that we must work through the second wave and help those who need to hide from it to do so.
The US has lost South America to China. They control the Li and other key minerals and while the US has been slapping sanctions on Venezuela trying to bully it they have fallen happily into China’s arms. Australia is almost cut off from the West now by Chinese business. And Africa was by China twenty years. While Europe and the US complained about dictators being nasty, people funnelling money into Swiss bank accounts and trying to stop genocides and endangered species, the Chinese arrived, flooded the continent with roads, money, specialist labour and have been harvesting it for two decades.
Personally, I don’t think we should be promoting full EVs in the West until we have a credible energy storage solution that isn’t controlled by China and also doesn’t require massive taxpayer funding to be competitive. It seems more logical to limit the requirement to Li batteries and also limit the demand on imported fossil fuels by combining the two correctly.
But not wanting to divert a live thread too badly, I think the most immediate impacts on our markets will be the inevitable second waves. We knew rioting would happen, that was inevitable, we just didn’t know what the catalyst would be. It is certainly a shame that a disease which brought everyone together is now seeing that pulled apart by political extremists and their self serving minority agendas of power and subjugation of the masses. We knew there would be massive stimulus packages that would distort the markets. But we also knew there would be second waves of C19 but what we don’t yet know is how the West will react.
The absolute worst thing for the West at the moment is the mess in the US and that it is election time. There is no strong leadership and worse it is a leadership that is divisive and has turned Americans against Americans and torn the wounds wider open than in a long time and at the worst possible time.
The markets need a stable political front in the US for them to be stable and right now the markets are looking a weird old, confused trustafarian who has never needed his dad more to fix what he can never comprehend and is just lashing out wildly. While on the other side you have another old man that few modern Americans can relate to or like.
With second waves and US political instability at the same time I’m guessing we can expect some choppy times as the market participants try to guess if these are going to trigger a major sell down to previous lows and beyond. I do feel that all rests upon how major countries now react to the second, third and fourth waves although arguably, the correct response to the second wave will remove concerns over all others. Do we go back in lockdown as a single community or do we put those who represent the greatest risk to the NHS into lockdown to allow everyone else to press on with the new normal. If you don’t 100% believe that the C19 virus will be totally eradicated and not return then I’m pretty sure logic dictates that we must work through the second wave and help those who need to hide from it to do so.
The 'second waves' might be multiple overlapping waves, as the virus hits populations separated by geography, demography, mobility, culture.
Perhaps the overall case stats will be relatively flat for years to come. If there is a comparable second wave in China to Wuhan would it even show up in the global stats?
This relative stability, will help markets, given the case numbers on a global scale is unlikely to massively spike or crash, until long after a vaccine is available.
Trying to remember what my point is, perhaps we won't see a similar correlation of cases to markets, as we saw with italy cases to sp500, again?
Perhaps the overall case stats will be relatively flat for years to come. If there is a comparable second wave in China to Wuhan would it even show up in the global stats?
This relative stability, will help markets, given the case numbers on a global scale is unlikely to massively spike or crash, until long after a vaccine is available.
Trying to remember what my point is, perhaps we won't see a similar correlation of cases to markets, as we saw with italy cases to sp500, again?
Edited by tattarrattat on Sunday 14th June 12:33
A44RON said:
NickCQ said:
A44RON said:
what's interesting about Warren Buffett is he's happy to quote that, but he has bought, held and sold A LOT of Gold & Silver in the past and present...
I didn't know that - when was he investing in it?I think Warren doesn't tell everyone what he's up to behind the scenes. I also read he sold the vast majority of his stocks at the beginning of the year
in 1997, Mr Buffett bought 111 million ounces of Silver at an average price of US$4.25 for a cost of = US$471,750,000
in 2006, he sold it at US$13.00 for = US$1.443 billion
Outstanding investment... However, if he had just waited until 2011 and then sold, when Silver price per oz went even higher to US$49.00 he would've sold it all for = US$5.439 billion
I'm sure he sleeps okay still
red_slr said:
Looks like the first start of the recession starting to filter through with large increase of people out of work.
FTSE responds by going up 2.5%.
I am giving up LOL.
I’ve long since looked for all the links between the things going on and markets!FTSE responds by going up 2.5%.
I am giving up LOL.
I wonder if part of it is simply that there is money swilling around that needs to live somewhere, and with other options being limited, people stay in the markets.
Equally, I’ve noticed that the tech industry regularly has RIFs (reduction in force....redundancies!), and the markets generally love it: shows the companies are “doing something about things”. Or something
There will always be businesses who do well out of otherwise recessionary times....and markets broadly reflect those, I suspect. Will things go down over the next 12-24 months? Maybe.....maybe not.
If anyone really gets it, do share!!
red_slr said:
Looks like the first start of the recession starting to filter through with large increase of people out of work.
FTSE responds by going up 2.5%.
I am giving up LOL.
Can I/should I bother to look today? FTSE responds by going up 2.5%.
I am giving up LOL.
I can just predict it will be counter-intuitive almost whatever happens!!
red_slr said:
Looks like the first start of the recession starting to filter through with large increase of people out of work.
FTSE responds by going up 2.5%.
I am giving up LOL.
Possibly because the figures might encourage the govt to stimulate the economy, possibly the previous level took increasing unemployment into account. Sell on the (pessimistic) rumour, buy on the news.FTSE responds by going up 2.5%.
I am giving up LOL.
red_slr said:
Looks like the first start of the recession starting to filter through with large increase of people out of work.
FTSE responds by going up 2.5%.
I am giving up LOL.
Main reasons are;FTSE responds by going up 2.5%.
I am giving up LOL.
The unemployment rate was virtually unchanged, indicating the furlough scheme is doing it's job.
Payroll numbers are down by 600,000 in May, however a substantial proportion will be taken up by people retiring (lots of "sod this, I've had enough") and overseas workers in hospitality returning to their home countries.
EU and UK playing nicely at yesterday's discussion, indicating Brexit compromise is possible.
More shoppers returning in the UK on day 1 that was seen in Europe when they reopened.
Also, as DrJ says, US is talking about a huge stimulus package and rumours are the UK will do the same.
As I said elsewhere, the government will spend their way out of this one.
mikeiow said:
I’ve long since looked for all the links between the things going on and markets!
If anyone really gets it, do share!!
I've read many articles searching for the answer, and they all have one saying - "the stock market is not the economy"If anyone really gets it, do share!!
Stock Market Has Almost Always Ignored the Economy
https://www.bloomberg.com/opinion/articles/2020-06...
Right or wrong, it’s useful to bear in mind that the stock market’s job is to impart the consensus around companies, not opine on or account for the broader political, social or even economic environment. And a good thing, too. It has rarely been good at it.
Edited by Phooey on Tuesday 16th June 10:03
red_slr said:
Looks like the first start of the recession starting to filter through with large increase of people out of work.
FTSE responds by going up 2.5%.
I am giving up LOL.
Do you not think the market may have expected and priced in an increase in unemployment?FTSE responds by going up 2.5%.
I am giving up LOL.
The FTSE will react to extent of bad news vs assumptions, not bad news per se.
soofsayer said:
Unemployment July onwards will be the interesting one. A number of businesses I know and deal with are making most furloughed employees redundant this month before they have to start paying. I am actually surprised the figures today were that bad before the stimulus is taken away.
Given it was up by only 0.1%, the figures weren't that bad.Gassing Station | Finance | Top of Page | What's New | My Stuff