Has the dead cat finished bouncing?

vitamin_joe

michaels said:

So we are into immoveable object (the real economy) meets irresistible force (quantitative easing) and us poor investors wondering which way to jump.

Yes, that's a nice way of putting it. A smart investor would probably be buying now, having bought from the dip in march, buoyed up by central bank promises to keep the stock market afloat. Personally, I just can't bring myself to buy with so much uncertainty around, so I'm sitting this one out with just a few long-term investments ongoing. Probably buy commodities in some form after the next pullback.

I don't think this is a dead cat bounce. I doubt it's a v-shaped recovery. Probably a bear market rally, but if so, a big one. Not going to end well imo. 

burner03

BrockStoker said:

bowlhead99 said:

My 'both are 50:50' with a smiley was just a continuation of the meme from another thread last month where Username999 told us that all investing was a gamble, because you will either make a profit or a loss, ergo 50:50. 

Which was swiftly followed up by the usual wags with "sign me up for the euromillions then, I'll either win it or I won't, 50:50", etc...

BananaRepublic said:

I know. However, given recent protests and political nonsense I’m starting to think such an event might be an improvement. 

Sorry. Missed the sarcasm, as usual.

Wow, mother drank excessively then.

Thrugelmir

BrockStoker said:

michaels said:

So there seems to be a distinct disconnect between reality - the economy is fuubared - and stock valuations - did someone say record high for the Nasdaq.

On the other side of the coin, I would imagine that events like this one also result in a sleeker market with less dead wood (zombi companies going bankrupt), so while economies might be fuubared, the market might actually end up better for it - at least in the case of certain sectors. What this crisis seems to be doing is acting as a catalyst to speed up the decline of sectors/industries already on the way out.

Cheap money has kept zombie firms afloat for many years. Trouble with recessions is that tend to be indiscriminate. Even good companies will fail. Not profit that matters it's cash. 

bogleboogle

Does anyone think the UK Govt could afford to reimpose a lockdown in the event of a second wave before the end of the year?  The UK national debt has exceeded GDP and the economy is already expected to contract 7-10% in 2020 (not expected to recover from this until 2023). Adding a second lockdown takes that to 14% and the recovery to probably 2024-2025.

Add the rapidly-approaching end of the Brexit transitional period (Dec 31st - but in reality Oct/Nov time for a deal to be reached) with no deal in sight (best case scenario at this point might be an Australia-style relationship with some sector-specific agreements, e.g. in services). A tough road lies ahead. 

bogleboogle

Another factor I omitted: it seems Biden is the current strong favourite to win in the US elections in November. Biden has not shown anything like the resolve to reach a US-UK FTA that Trump has. So this could exacerbate the impact of the UK's potential failure to reach an agreement with the EU by October/November...

stephenadarglas

............... and there will be a vaccine soon and then the sky's the limit

bogleboogle

stephenadarglas said:

............... and there will be a vaccine soon and then the sky's the limit

Vaccine will arrive in 2021 at the absolute earliest. Even then, the idea that a vaccine is some panacea is totally misinformed (the seasonal flu has been around for years and numerous vaccines exist, but it's still around!).
But sure, a vaccine will likely be made available at some point in 2021 and this will largely lead to the end of social distancing/lockdown measures. It won't mean the UK's economy will suddenly be the same size it was in 2019 before 2022-2023 and the UK national debt is at 60-year record levels, though. 

NorthernJoe

stephenadarglas said:

............... and there will be a vaccine soon and then the sky's the limit

Can you name one human coronavirus that we have a vaccine against? 

SARS (2003)      Nope
MERS (2012)     Nope
HCoV-NL63       Nope 
HCoV-229E       Nope
HCoV-HKU1     Nope
HCoV-OC43     Nope 

Alistair31

NorthernJoe said:

stephenadarglas said:

............... and there will be a vaccine soon and then the sky's the limit

Can you name one human coronavirus that we have a vaccine against? 

SARS (2003)      Nope
MERS (2012)     Nope
HCoV-NL63       Nope 
HCoV-229E       Nope
HCoV-HKU1     Nope
HCoV-OC43     Nope 

Were any of them so potent in their destruction of life and livelihood? The stakes are high and the effort of the scientific community is much greater now. 

I’d bet anyone a few £ that a vaccine will come, most likely the Oxford one. Improved treatments will also come.

A Biden presidency is a bigger risk to the stock market IMO.

EdGasketTheSecond

The economy is a bigger risk to the stock market than either candidate