Screw the Stock Market...

[myboynoah]

It makes zero sense. Take today for example: they announce that the GDP shrunk 4.8%. That is a huge drop! GE said that $1B of earnings were wiped out due to COVID. AirBnB is major trouble. I am sure all the people leveraged on extra properties that they are using for AirBnB in trouble. Tons of other bad news. But a nod of reassurance from the Fed and a bit of good news on remdesivir and the market surges. It is almost like investors are so desperate for signs that we are turning a corner that they are pricing in the rebound before it happens. But there is going to be so much more bad news. I predict another drop.

How can you say that? Are you an epidemiologist?

[myboynoah]

Can someone explain why the stock market has been so strong recently? Despite the unprecedented worldwide slowdown, I'm essentially where I was when the first COVID case was announced. Even if a vaccine or effective treatment becomes available sooner than expected, the economy has still taken a major hit and can't bounce back fully for many months to come. Is this another irrational exuberance thing?

Well, Jared Kushner did say that by July the countrey will really be rocking again.

EDIT: Sorry about that response. I involutarily coughed it up while in the throws of a TDS attack.

[Jeff Lebowski]

The market is irrational when you look at it in short spurts. That being said, some forecasts a coupel weeks ago predicted GDP would drop 10%, so when it only shrinks 4.8% you get a nice rebound. That actually makes sense since GDP beat most forecasts. Also, states are opening up sooner than forecasted and the virus isn't as fatal as people thought (confirmed through the latest serological testing). The market isn't even close to what it was when it dropped so it has a long way to go to climb out of this mess.

Crude prompt month (June) was up pretty big today but it is still about $4 under the next month (July). That signals that storage will remain full for at least June but there is a bit of a prediction in the oil price that demand will pick up in July and storage will start to go down. I think waterborne storage costs around $4 per barrel per month, but obviously there are a lot of othe rfactors at play. But seeing oil prices go up signals that things might start to pick up with demand, travel, commuting, etc.

The S&P is exactly where it was last October. Down 15% from the February high, but if you look at a multi-year moving trend, we aren't down much.

[Moliere]

The market is irrational when you look at it in short spurts. That being said, some forecasts a coupel weeks ago predicted GDP would drop 10%, so when it only shrinks 4.8% you get a nice rebound. That actually makes sense since GDP beat most forecasts. Also, states are opening up sooner than forecasted and the virus isn't as fatal as people thought (confirmed through the latest serological testing). The market isn't even close to what it was when it dropped so it has a long way to go to climb out of this mess.

Crude prompt month (June) was up pretty big today but it is still about $4 under the next month (July). That signals that storage will remain full for at least June but there is a bit of a prediction in the oil price that demand will pick up in July and storage will start to go down. I think waterborne storage costs around $4 per barrel per month, but obviously there are a lot of othe rfactors at play. But seeing oil prices go up signals that things might start to pick up with demand, travel, commuting, etc.

[Bo Diddley]

It makes zero sense. Take today for example: they announce that the GDP shrunk 4.8%. That is a huge drop! GE said that $1B of earnings were wiped out due to COVID. AirBnB is major trouble. I am sure all the people leveraged on extra properties that they are using for AirBnB in trouble. Tons of other bad news. But a nod of reassurance from the Fed and a bit of good news on remdesivir and the market surges. It is almost like investors are so desperate for signs that we are turning a corner that they are pricing in the rebound before it happens. But there is going to be so much more bad news. I predict another drop.

It'll be big. We're just waiting for enough people to share enough pain. Stimulus money is keeping it at bay for now.

[Jeff Lebowski]

Can someone explain why the stock market has been so strong recently? Despite the unprecedented worldwide slowdown, I'm essentially where I was when the first COVID case was announced. Even if a vaccine or effective treatment becomes available sooner than expected, the economy has still taken a major hit and can't bounce back fully for many months to come. Is this another irrational exuberance thing?

It makes zero sense. Take today for example: they announce that the GDP shrunk 4.8%. That is a huge drop! GE said that $1B of earnings were wiped out due to COVID. AirBnB is major trouble. I am sure all the people leveraged on extra properties that they are using for AirBnB in trouble. Tons of other bad news. But a nod of reassurance from the Fed and a bit of good news on remdesivir and the market surges. It is almost like investors are so desperate for signs that we are turning a corner that they are pricing in the rebound before it happens. But there is going to be so much more bad news. I predict another drop.

[Bo Diddley]

What better place for the meat to go? At least it will end up somewhere that will take good care of it.

I've been doing my part.

[All-American]

If the meat supply chain is disrupted, it'll all go south.

What better place for the meat to go? At least it will end up somewhere that will take good care of it.

[Bo Diddley]

If the meat supply chain is disrupted, it'll all go south.

[Uncle Ted]

Can someone explain why the stock market has been so strong recently? Despite the unprecedented worldwide slowdown, I'm essentially where I was when the first COVID case was announced. Even if a vaccine or effective treatment becomes available sooner than expected, the economy has still taken a major hit and can't bounce back fully for many months to come. Is this another irrational exuberance thing?

One word: Drumpf. (It had nothing to do with the Fed deciding not to raise interest rates and Texas starting to open up things on Friday.)

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Free money!

[BigFatMeanie]

Possibly a combination of things?

- Some irrational exuberance
- With interest rates so low and bond yields in the toilet, there isn't really any good place to park cash.
- The drop in March was so precipitous that for some companies the drop was an over-reaction. There are businesses out there with strong balance sheets that can weather the storm and are still worth investing in.

[PaloAltoCougar]

Can someone explain why the stock market has been so strong recently? Despite the unprecedented worldwide slowdown, I'm essentially where I was when the first COVID case was announced. Even if a vaccine or effective treatment becomes available sooner than expected, the economy has still taken a major hit and can't bounce back fully for many months to come. Is this another irrational exuberance thing?

[Moliere]

Not exactly a stock market post but indirectly it will have stock market impact. WTI May futures contracts trading negative today...

Yep, currently at $-7 but it's also settlement day for May contracts so some wacky things were expected...but this is off the charts wacky. No one is using the May contract to predict or price anything, but it's still very interesting that it could settle negative today.

[Flystripper]

Not exactly a stock market post but indirectly it will have stock market impact. WTI May futures contracts trading negative today...

[myboynoah]

There are really good long term values of the non-cruise ship sector variety. I put around $1000 each into Amex at $70 and GS at $150 earlier this week. I put $500 into Discover at around $30 and thought about putting some money into Capital One, but it doesn't earn the merchant account fees like Amex and Discover. Around $7k into an index last Friday. We reached close to a 40% overall decline on Monday. TBH, Amex worries me a bit since it went down to around $12 a share after the mortgage mess. I have no idea what the full economic impact of what's happening right now.

I put another $300 on Royal Caribbean and Six Flags (around $150 each). Norwegian went back down to $16, so that's only around a 100% return over a week. All of these companies could be in bankruptcy by the end of year for all I know, or they'll be fine and you can buy a share for less than 20% of their value from the peak from February. I don't think they're coming anywhere close to that peak for a really long time, but it's not like it's a permanently dying industry.

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