Is The Worst Behind Us?
FINALLY ITS FRIDAY Am I the only one losing track of time? I could only tell it was Friday because the dress code changed in our morning meeting. A few strategy points today: Wall St’s 400 point reversal on the Gilead (lack of efficacy) Chinese trial story in the Financial Times suggests to me that the market is still in a general uptrend. This little sell-off we’ve responded to may not be significant after all. The market has certainly tired, but there doesn’t seem to be a risk of an all out collapse again. The market is shrugging off dire headlines. Every economic release is a disaster and the market doesn’t mind. Overnight US New Home sales saw the biggest fall since 2013, 26.5m people unemployed in the US in five weeks, the most since the Great Depression, 4.43m in the last week, US PMI the lowest since 1998, UK PMI at 12.9 down from 36 and the worst estimate was 31. On top of that we are trading through the disastrous oil price headlines. Yet the market is not shocked and doesn’t collapse. This resilience is born out of a couple of things:
- Prices are already discounting a lot.
- COVID-19 is (despite the Super bear warnings) presumed defeated.
- Government stimulus has arguably over-cooked it on misplaced paranoia.
- The oil price has bottomed.
- In the next month or two we are all going to be back in the office hearing stories about businesses being kick-started back into action.
- In the next couple of months its going to be business as usual and any negative headline will be talking about the past whilst the future is much brighter.
- Housing market
- Bars and Restaurants