Has the dead cat finished bouncing?

coastline

ProDave said:

What puzzles me, is the HUGE drop in GDP is not a surprise. It has widely been speculated and discussed.  So WHY when is it announced does the market drop?  It seems to confirm my theory that the "market" is completely divioced from reality at the moment.

The question is more "why has the market been rising for 2 months?" not why is it falling now?

As posted earlier media commentators usually try to link market movements to news stories. This could well be correct in some cases but not all. A fair bit of the time its all related to short term profit taking and sentiment. If you are referring to the FTSE and the GDP announcement then the drop is probably more likely to be linked to overnight futures movements.
Two charts below with live links of the Dow and FTSE. Open both of them and set the timeframe at the top to 15 minutes to view some recent moves. If you hover over them you'll see the changes at any particular time out of market hours. Last night the DOW got as low as 25100 and the FTSE 5970. Today for whatever reason the FTSE has opened near last nights low . If you set the two charts to 5 min timeframes you can see plenty volatility between 7.00 am and 9 am this morning.
The DOW is currently out of hours and is trading higher at 25700 and as the game normally takes the lead from the USA the FTSE is also currently higher 6150. So today in normal market hours there's a fair chance the DOW will move between 25100 and 25700 and more. Bookmark both links and you'll have a better understanding of what's going on.
https://tradingeconomics.com/united-kingdom/stock-market
https://tradingeconomics.com/united-states/stock-market
Regarding the recent rally that's what markets do. Investors are always looking for opportunities to buy cheaper with a eye on future recovery. I picked up the link below the other day which shows analysts expectations for the next two years. In 2021- 2022 they expect a recovery and at current prices for SP 500 the P/E ratio falls from 25 today to 17. That's a fair increase in earnings. Who knows ?
https://pbs.twimg.com/media/EaKs-ESWkAccon0?format=jpg&name=900x900

Thrugelmir

ProDave said:

What puzzles me, is the HUGE drop in GDP is not a surprise. It has widely been speculated and discussed.  So WHY when is it announced does the market drop?  It seems to confirm my theory that the "market" is completely divioced from reality at the moment.

The question is more "why has the market been rising for 2 months?" not why is it falling now?

Yesterday the Fed effectively killed off any remaining hope of a V shaped recovery.  Still leaves many companies on demanding earning ratings. Should there be a second wave.......... 

kinger101

ProDave said:

What puzzles me, is the HUGE drop in GDP is not a surprise. It has widely been speculated and discussed.  So WHY when is it announced does the market drop?  It seems to confirm my theory that the "market" is completely divioced from reality at the moment.

The question is more "why has the market been rising for 2 months?" not why is it falling now?

What really happened is the market dropped, then someone paid to explain why the market dropped after the event picked an item of bad news that day and singled it out as being the reason.  The fact the US market, that largely couldn't give a toss about UK GDP dropped more severely was conveniently ignored.


 

Sailtheworld

Thrugelmir said:

ProDave said:

What puzzles me, is the HUGE drop in GDP is not a surprise. It has widely been speculated and discussed.  So WHY when is it announced does the market drop?  It seems to confirm my theory that the "market" is completely divioced from reality at the moment.

The question is more "why has the market been rising for 2 months?" not why is it falling now?

Yesterday the Fed effectively killed off any remaining hope of a V shaped recovery.  Still leaves many companies on demanding earning ratings. Should there be a second wave.......... 

Well it might turn out that some people's rather panicked approach to Coronavirus will pay dividends later in the year. They must be wondering if they've called this right given anyone with a balanced approach who didn't do much (if anything) are back around February highs following a market rally that even those will the powers of foresight missed. If someone completely misread the market effect of the first wave I'd really urge them not to try and read the tea leaves by guessing if there will be a second wave and then guessing what a response might be.

If we are guessing though infection rates seem to be disappointingly low - I'd been hoping that lots of people had had it and didn't know - the ONS survey quashes those hopes although CV might not be that infectious. Track & Trace is beyond an omnishambles so that isn't going to help much. This first wave has scope to run yet without worrying about the second and third.

Cus

The money has been printed, this money rises to the top, and they who collect it just invest in assets.  Markets going up.

quirkydeptless

Stock market vs Second Wave

Sailtheworld

quirkydeptless said:

Stock market vs Second Wave

That's two predictions for the price of one. The first is that there will be a second wave and the second that stock markets will crash.

The only takeaway from this thread (26 pages in it should be clear) is that the future is difficult to predict as is the market response to that future.

MaxiRobriguez

Sailtheworld said:

quirkydeptless said:

Stock market vs Second Wave

That's two predictions for the price of one. The first is that there will be a second wave and the second that stock markets will crash.

The only takeaway from this thread (26 pages in it should be clear) is that the future is difficult to predict as is the market response to that future.

Whilst we all chat I get the impression a good 90% of us on here haven't fundamentally changed our investing approach that much. Possibly tweaked at the sides but nothing dramatic. Most people will have been diversified and plenty will have cash buffers put to use in the sell-offs in March, which they would have done Rona or no Rona.

I bought almost £20k of stocks in early April with cash I'd been sitting on for months, despite thinking the virus would get far worse, because it felt like there was a buying opportunity in companies that shouldn't be overly impacted by the virus and would generate long term decent returns...

... It almost didn't matter what the sell-off trigger was.

bowlhead99

Sailtheworld said:

quirkydeptless said:

Stock market vs Second Wave

That's two predictions for the price of one. The first is that there will be a second wave and the second that stock markets will crash.

The only takeaway from this thread (26 pages in it should be clear) is that the future is difficult to predict as is the market response to that future.

There might be a second wave or there might not be. If there is, stock markets might fall or they might not.  As both are 50:50, the chance of getting a second wave and it being bad for stocks, is only 50% x 50% = 25%.  So, more likely than not, it's all fine. 

[ducks]

badger09

I'd like to think that guy survived, relatively unscathed.
However, he might have been very seriously injured, taking many years to recover to anything like his previous health