Let's have a guess EVERY day: What will the Stock market do TOMORROW?

[HitchHiker71]

I can’t see that much of a drop because this isn’t a financial crisis. It’s a virus issue. We don’t have financial fraud, businesses collapsing, people thrown out of work in the millions, everyone losing their homes. It’s overdone. I will just keep buying with excess cash.


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This is a common misconception with cyclical business recessions. The average market drop for a typical cyclical recession is close to 40%, so 50% is not an outlier case when looking at the actual data over time. This virus will cause a recession - probably a global recession - due to supply side shocks that will in turn cause demand side shocks in the form of major temporary business revenue declines, which will cause layoffs, which will cause a decline in consumer confidence and therefore consumer spending. Since 70% of our GDP is consumer spending driven - a recession is a likely outcome.

A cyclical recession is also overdue, which means that the coming recession will most likely be felt more deeply than the 40% average. 50% is therefore probably not far off the mark. We saw a 10% drop in one day today, and the news cycle and reality is going to get much worse before it gets better. We are 4-6 weeks out from our own Italy given our lackadaisical response to this epidemic to date IMHO.

That said I agree with you - buy on the way down - even if you buy now and lose another 20% (we are down 28% as of today), it will come back eventually and probably faster than most people think when it does turn around. Similar to how the drops are occurring much faster than people tend to think is normal.


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[Fredflintstone]

This is a common misconception with cyclical business recessions. The average market drop for a typical cyclical recession is close to 40%, so 50% is not an outlier case when looking at the actual data over time. This virus will cause a recession - probably a global recession - due to supply side shocks that will in turn cause demand side shocks in the form of major temporary business revenue declines, which will cause layoffs, which will cause a decline in consumer confidence and therefore consumer spending. Since 70% of our GDP is consumer spending driven - a recession is a likely outcome.

A cyclical recession is also overdue, which means that the coming recession will most likely be felt more deeply than the 40% average. 50% is therefore probably not far off the mark. We saw a 10% drop in one day today, and the news cycle and reality is going to get much worse before it gets better. We are 4-6 weeks out from our own Italy given our lackadaisical response to this epidemic to date IMHO.

That said I agree with you - buy on the way down - even if you buy now and lose another 20% (we are down 28% as of today), it will come back eventually and probably faster than most people think when it does turn around. Similar to how the drops are occurring much faster than people tend to think is normal.


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Both well said.


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[Fredflintstone]

Fred, you’re a smart guy and I really enjoy reading your posts. Man, I hope you’re right. But, since you’re Canadian, I’m not sure you can appreciate what we’re up against. The virus is not our biggest problem!


Harry

Well said. I hope I am right too. The main risk I see is this virus issue will cause a recession and further point drop because people are afraid to step out there front door. Fear will drive the reality.

I still see this as a blip. The minute a vaccine or treatment is found, watch the stock market rocket.


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[Brett]

This is a common misconception with cyclical business recessions. The average market drop for a typical cyclical recession is close to 40%, so 50% is not an outlier case when looking at the actual data over time. This virus will cause a recession - probably a global recession - due to supply side shocks that will in turn cause demand side shocks in the form of major temporary business revenue declines, which will cause layoffs, which will cause a decline in consumer confidence and therefore consumer spending. Since 70% of our GDP is consumer spending driven - a recession is a likely outcome.

A cyclical recession is also overdue, which means that the coming recession will most likely be felt more deeply than the 40% average. 50% is therefore probably not far off the mark. We saw a 10% drop in one day today, and the news cycle and reality is going to get much worse before it gets better. We are 4-6 weeks out from our own Italy given our lackadaisical response to this epidemic to date IMHO.

That said I agree with you - buy on the way down - even if you buy now and lose another 20% (we are down 28% as of today), it will come back eventually and probably faster than most people think when it does turn around. Similar to how the drops are occurring much faster than people tend to think is normal.


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"buy on the way down"
just time the market downturn when it declines 50%


yeah, I suppose that's fine if you have the cash and not selling stocks to fund this profit opportunity

 

[bluehende]

I bought at the close today. A little bigger nibble than I did last week. If I get a quick return like last time I will take my money and run. If I am in early as the current futures look like I am, I will be shocked if in 10 yrs I will have wished I had put my money in a 10 yr bond. With them paying 0.7% I will be ahead if it even stays at the same price as the dividend for the stock (qqq) is higher than that. I will continue to buy bigger and bigger buys if it falls more.

 

[HitchHiker71]

Well said. I hope I am right too. The main risk I see is this virus issue will cause a recession and further point drop because people are afraid to step out there front door. Fear will drive the reality.

I still see this as a blip. The minute a vaccine or treatment is found, watch the stock market rocket.


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Check out stock ticker INO who is on the front lines of a possible COVID-19 cure. Went from $1 to about $16 then back to $5.50 and has risen back a bit the last couple of days despite the market drops. Any stock that is even rumored to have a vaccine candidate will experience wild swings.


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[Rolltydr]

Well said. I hope I am right too. The main risk I see is this virus issue will cause a recession and further point drop because people are afraid to step out there front door. Fear will drive the reality.

I still see this as a blip. The minute a vaccine or treatment is found, watch the stock market rocket.


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The coronavirus has almost fully exposed the lack of leadership. The only person giving information that can be trusted is Dr. Fauci. I hope he can survive telling the truth.

 

[Panina]

The coronavirus has almost fully exposed the lack of leadership. The only person giving information that can be trusted is Dr. Fauci. I hope he can survive telling the truth.

Do you mean lack of leadership from both sides and from leaders of many countries? I don’t need an answer as placing blame means blaming everyone and many countries and blame at this point will fix nothing. Unfortunately this is a fast spreading virus. Unless initially everyone stood home, locked their doors and did not leave their home in the US plus we did not let anyone enter our country when it started I don’t see how we could have contained it.

 

[Fredflintstone]

Do you mean lack of leadership from both sides and from leaders of many countries? I don’t need an answer as placing blame means blaming everyone and many countries and blame at this point will fix nothing. Unfortunately this is a fast spreading virus. Unless initially everyone stood home, locked their doors and did not leave their home in the US plus we did not let anyone enter our country when it started I don’t see how we could have contained it.

We are so globally connected today. That’s what makes containment so difficult.


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[HitchHiker71]

We are so globally connected today. That’s what makes containment so difficult.


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We also simply cannot contain this virus using the authoritative approach that China was able to leverage. Locking down entire cities with 15MM people and strictly regimenting excursions just isn’t feasible for us, even if we were to deploy the national guard - we just don’t have the volume of people to do it. Our freedom comes at a price - and we are going to see what that price is in the days and weeks that lie ahead I’m afraid.


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[Brett]

Do you mean lack of leadership from both sides and from leaders of many countries? I don’t need an answer as placing blame means blaming everyone and many countries and blame at this point will fix nothing. Unfortunately this is a fast spreading virus. Unless initially everyone stood home, locked their doors and did not leave their home in the US plus we did not let anyone enter our country when it started I don’t see how we could have contained it.

'both sides' !
However one "side" has previously denied problems and repeatedly said .... hoax .... fake news ... “fraud” by the deep state to spread panic in the populace,
(and many other things)
unfortunately the stock market does not take sides

 

[Rolltydr]

Do you mean lack of leadership from both sides and from leaders of many countries? I don’t need an answer as placing blame means blaming everyone and many countries and blame at this point will fix nothing. Unfortunately this is a fast spreading virus. Unless initially everyone stood home, locked their doors and did not leave their home in the US plus we did not let anyone enter our country when it started I don’t see how we could have contained it.

I saw a speech today, that if it had been given last night, would have been reassuring to both sides. It addressed the steps needed to mitigate the virus, plus would have calmed nervous investors, businesses and workers that the economy would be okay. Instead, we heard a speech last night that incorrectly stated nobody would be allowed to enter the US from Europe. The virus is already here. It’s too late to shut the door! And, after the speech, we found out it wasn’t true anyway. It scared the hell out of everyone and the market fell 2,000 more points today.

Yes, this is a fast spreading virus. We needed a fast, decisive response that had been planned for. Instead, we got bs on top of more bs. It stinks!

 

[Panina]

'both sides' !
However one "side" has previously denied problems and repeatedly said .... hoax .... fake news ... (and many other things)
unfortunately the stock market does not take sides

This isn’t Facebook and I stopped being on Facebook because of political bullying on both sides.

I will respectfully say, political opinions should not be here, neither side. You response is politically slanted as others are, yours to the left, others to the right. Everyone let’s stop this before important threads are taken down.

I must admit I am disappointed on how tuggers are acting. I normally stay silent but tug is too important.

I will agree stock market does not take sides.

 

[Brett]

This isn’t Facebook and I stopped being on Facebook because of political bullying on both sides.

I will respectfully say, political opinions should not be here, neither side. You response is politically slanted as others are, yours to the left, others to the right. Everyone let’s stop this before important thread are taken down.

I must admit I am disappointed on how tuggers are acting. I normally stay silent but tug is to important.

I will agree stock market does not take sides.

politically slanted ?!
my "left" is reading the Wall Street Journal every day for the last 40 years !
seriously

 

[Panina]

politically slanted ?!
my "left" is reading the Wall Street Journal every day for the last 40 years !
seriously

Your words.... “However one "side" has previously denied problems and repeatedly said .... hoax .... fake news ... “fraud” by the deep state to spread panic in the populace,
(and many other things)”
imo not necessary and slants politically which should not be on tug. You have valid points you want to make that do not need the political opinion.

And my thoughts were not only meant for you, so I apologized for directly responding initially to you. I should have done a separate response listing everyone’s political comments slant. I personally cringe when I hear any political reference on tug. It is against the rules.

 

[Brett]

Your words.... “However one "side" has previously denied problems and repeatedly said .... hoax .... fake news ... “fraud” by the deep state to spread panic in the populace,
(and many other things)”
imo not necessary and slants politically which should not be on tug. You have valid points you want to make that do not need the political opinion.

And my thoughts were not only meant for you, so I apologized for directly responding initially to you. I should have done a separate response listing everyone’s political comments slant. I personally cringe when I hear any political reference on tug. It is against the rules.

It's the absolute truth
what was reported in the Wall Street Journal (and other publications) concerning responses to the coronavirus outbreak
I'm sorry you view these truths as personal opinions

 

[Panina]

It's the absolute truth
what was reported in the Wall Street Journal (and other publications) concerning responses to the coronavirus outbreak
I'm sorry you view these truths as personal opinions

For every truth you find in an article, you will find the truth in another saying something different. It is still political if it has political slants whether it is the absolute truth or not. You missed the point. In any article or not, political discussions should not be on tug. I tried, this is the last I will discuss this. Let the moderators decide.

 

[Fredflintstone]

I guess today was the worst one day drop ever. You know what saddens me?

If this continues, folks will get laid off. Many will need to cash out some investments to pay bills at pathetic prices. It’s like a double whammy for them.

I hope a cure, vaccine is found soon.


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[Brett]

For every truth you find in an article, you will find the truth in another saying something different. It is still political if it has political slants whether it is the absolute truth or not. You missed the point. In any article or not, political discussions should not be on tug. I tried, this is the last I will discuss this. Let the moderators decide.

fine
I've read the Wall Street Journal for 40 years and that's where I find the "truth" .... well, not always on the opinion page !)
But you are correct, different news media will reflect the "truth" differently
And I suppose everyone has a different "political" slant - the stock market only has only one slant

 

[HitchHiker71]

I guess today was the worst one day drop ever. You know what saddens me?

If this continues, folks will get laid off. Many will need to cash out some investments to pay bills at pathetic prices. It’s like a double whammy for them.

I hope a cure, vaccine is found soon.


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Recession is very likely due to the supply shock followed by the resulting demand shock. Layoffs come with all recessions. Best to prepare now.

We can attempt to accelerate a vaccine but from what I’ve read even an aggressive timeline will take a year before human trials are complete. Saw a recent interview with one of our foremost infectious disease experts and he said that all of this talk about a vaccine in weeks or even several months is happytalk.


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[Fredflintstone]

Recession is very likely due to the supply shock followed by the resulting demand shock. Layoffs come with all recessions. Best to prepare now.

We can attempt to accelerate a vaccine but from what I’ve read even an aggressive timeline will take a year before human trials are complete. Saw a recent interview with one of our foremost infectious disease experts and he said that all of this talk about a vaccine in weeks or even several months is happytalk.


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Yes, I can see a year as well. I am ok. I just feel bad for others.

I live in Alberta where we have had multiple economic whammys. Here they are

1. Alberta is a huge oil province. We have heavy oil that requires expensive refining. Need I say more there?
2. There have been stalls (in the courts/protests) on critical pipeline projects and major development requests (project can take 10 years to clear). This has resulted in a huge exodus of major oil firms to the US. The service industries are not far behind.
3. Now the coronavirus issue. We have only 19 confirmed cases so far. Funny, 70 percent of the cases were from people visiting Florida. Do they have major coronavirus issues?


I have never seen Alberta in such a financial mess.

So, we have felt the pain early. Lucky for me, my main clients are government. I am going part time in April and one of my colleague is very happy because he was about to get laid off.


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[geekette]

For every truth you find in an article, you will find the truth in another saying something different.

I saw a man on my tv that said it is a hoax. this man occupies the highest office in the land. these are not opinions.

 

[geekette]

I guess today was the worst one day drop ever. You know what saddens me?

If this continues, folks will get laid off. Many will need to cash out some investments to pay bills at pathetic prices. It’s like a double whammy for them.

I hope a cure, vaccine is found soon.


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people are already being laid off. Port workers and drivers have little work with no shipments showing up.

 

[HitchHiker71]

Yes, I can see a year as well. I am ok. I just feel bad for others.

I live in Alberta where we have had multiple economic whammys. Here they are

1. Alberta is a huge oil province. We have heavy oil that requires expensive refining. Need I say more there?
2. There have been stalls (in the courts/protests) on critical pipeline projects and major development requests (project can take 10 years to clear). This has resulted in a huge exodus of major oil firms to the US. The service industries are not far behind.
3. Now the coronavirus issue. We have only 19 confirmed cases so far. Funny, 70 percent of the cases were from people visiting Florida. Do they have major coronavirus issues?


I have never seen Alberta in such a financial mess.

So, we have felt the pain early. Lucky for me, my main clients are government. I am going part time in April and one of my colleague is very happy because he was about to get laid off.


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Wow, I don’t follow Canadian economics or politics very closely, I’ve read enough to know about the heavy oil sand processing being on the expensive side, and am familiar with the pipeline delays that route through the US at least.

Yes we have had some COVID cases in Florida. But we are somewhat reactive in our management of this outbreak to date and are therefore struggling to ramp up testing availability. All told we have only tested a limited number of cases to date across the US. The testing ratios per 100k people when comparing the US to other countries, such as South Korea, that are struggling with COVID outbreaks is not good. Our numbers are much lower in comparison. We also haven’t been proactively educating the public on the symptoms and the need for testing until very recently, many of which are hard to differentiate from influenza or even the common cold especially during the early stages. Point being, we probably have many more undiagnosed cases than diagnosed cases at this time, especially in epicenters such as Orlando Florida that have huge international vacation appeal.


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[CO skier]

Probably shouldn't, but I'm thinking about buying Exon this week. Looking at Royal Caribbean Cruise Lines. geezy peezy, how much lower can these go ?

Bill

Royal Caribbean Cruise Lines stock is down more than 30% from when you posted this YESTERDAY. Still thinking of buying?