Investing Thread

[Frenns Liquor Depot]

Goldman just cut US GDP forecast to -5% EOY. Was at 0% going into Q1. We're about to enter a world of suck.

https://twitter.com/biancoresearch/status/1239301815847567360

This is like slamming on the brakes when driving 100mph.  Really at this point the question is how long are we stopped and how hard is the recovery. 

[JWags85]

Fed just cut interest rate by a full point....

https://www.nytimes.com/2020/03/15/business/economy/federal-reserve-coronavirus.html

Probably a boost in the short-term, but the long-term outcome is still FAR more dependent on whether we can flatten the covid-19 curve.

Yep, probably puts in more of a backstop, stems the aggressive bleeding, but we will continue to drift downwards in the future months if we don’t get a handle on this

[DegenerateDish]

Futures just opened at -800.

[Chili]

Futures just opened at -800.

Down -1100 now.


WORLD OF SUCK!

[Hards Alumni]

Fed just cut interest rate by a full point....

https://www.nytimes.com/2020/03/15/business/economy/federal-reserve-coronavirus.html

Probably a boost in the short-term, but the long-term outcome is still FAR more dependent on whether we can flatten the covid-19 curve.

To me, as an investor this seems like pure panic.  I get the idea, but confidence is shaken.

[Chili]

To me, as an investor this seems like pure panic.  I get the idea, but confidence is shaken.

The issue is government is putting panic on the wrong items - should be focused on health crisis - the market will work itself out. We're screwed.

[forgetful]

To me, as an investor this seems like pure panic.  I get the idea, but confidence is shaken.

Speaking of confidence. The people standing behind the president as he spoke, did not look confident. They looked sick, one even shaking his head.

If your read body language, it was not a good read.

[Jockey]

Futures just opened at -800.

Not a big surprise 

[Jockey]

Speaking of confidence. The people standing behind the president as he spoke, did not look confident. They looked sick, one even shaking his head.

If your read body language, it was not a good read.

Until he learns to just shut up, things will continue to go down the tubes. Lies and bitterness do not stem a crisis on Wall Street.

[The Hippie Satan of Hyperbole]

Until he learns to just shut up, things will continue to go down the tubes. Lies and bitterness do not stem a crisis on Wall Street.

And bravado.

[GooooMarquette]

Speaking of confidence. The people standing behind the president as he spoke, did not look confident. They looked sick, one even shaking his head.

If your read body language, it was not a good read.

Agreed. He might know how to work a camera, but he needs work at inspiring public confidence in times of crisis. Like the other day when he was asked if he took any responsibility for the delays in covid-19 testing and he responded "No, I don't take any responsibility at all." Smart answer would have been to say something like "yes, but we are using that as a learning moment to make up ground" or something similar.

Anyhow, we're a long way from "the buck stops here."

[rocky_warrior]

To me, as an investor this seems like pure panic.  I get the idea, but confidence is shaken.

+1.  I mean, The market tanked when they had the emergency .50 cut.  I guess they wanted to double down on the panic. Idiots.

And by idiots - I mean - there's reason to panic.  They need to pump 1.5 trillion over the next 3 weeks just to keep money flowing properly. That's not sustainable or fiscally responsible   And effective negative interest on fed funds to keep folks afloat.  Yikes.  I've been expecting a correction, but this has even me frightened.

[jesmu84]

Temporary UBI?

[rocky_warrior]

Well, we're now basically Japan - for the last 20 years...

https://www.japantimes.co.jp/news/2019/02/06/business/financial-markets/dissecting-bank-japans-zero-rate-policy-20-years/#.Xm7WxahKiMo

Instead, two decades of rock-bottom interest rates have hurt the nation of savers, who have responded by tightening their belts. Low-cost loans have propped up unprofitable companies while big business has piled into investing overseas as the market shrinks at home.

Those two decades of failure to reflate the economy have created a whole generation of consumers with little understanding or expectation of rising prices, complicating Kuroda’s efforts even further. Banks and debt markets have been caught in the crossfire, with negative rates crushing the profit margin on lending and the BOJ’s massive asset buying under quantitative easing sucking the life out of bond trading.

While it’s hard to call the world’s greatest monetary experiment a success, it’s also clear things would have been far worse without it. The BOJ has got the better of deflation, even if the consumer price index dips into the red briefly in 2019 because of low oil prices and one-off changes in phone and education costs. And instead of economic malaise, Japan has enjoyed a modest expansion in recent years, with unemployment near the lowest since 1992 and wage growth, though tepid, still the best in many years.

How it works for our economy (and the world) is yet to be seen.

[MU82]

Futures just opened at -800.

S&P 500 futures trigger overnight limit-down band of -5%. At this point, they can trade higher, but not lower, until the cash market opens at 9:30 a.m. ET.

https://seekingalpha.com/news/3551843-s-and-p-500-futures-tumble-limit-down-15-minutes-after-open-be-quiet-evening

[Chili]

Get ready for a day of bad history. World of Suck.

Jim Bianco
@biancoresearch
The S&P 500 ETF (SPY) is trading is the pre-market session without limits.

As I write the bid is 244.04, or an S&P 500 index level of 2440.4.

Friday's S&P 500 close was 2711.  So SPY implies 271 point loss or 10%.

It is about 1.4% UNDER last Thursday's low of 2478.

(1/4)

When the NYSE opens ....

* Down 7%, 15 minute halt.

* Re-open and slide again.  Down 13% is a 1 hour halt ("level 2" limit has never been reached).

* Reopen and go down 20%, close for the day (unless it is with less than 30 minutes before the close, then remains open).

(2/4)

Jim Bianco
@biancoresearch
Watching Bloomberg and the "experts" are suggesting other things the Fed can do.

Try this, they did all they can.  IT IS NOT WORKING!  THE FED PUT NO LONGER WORKS!!

Einstein's definition of insanity is doing the same thing over and over and expecting a different result.

(3/4)

Jim Bianco @biancoresearch
2h
Right now the S&P 500 would be 28% off its all-time high (set less than a month ago!)

UK FTSE, down 34%
German DAX, down 38%
Italy FTSEMIB, down 41%

US stock have further room to fall just to catch up to Europe.

(4/4)

Jim Bianco @biancoresearch
1h
Trading halt levels today (March 16) ....

S&P 500 CASH
* -7% (-189.77 pts) to 2521.25 (15 minute halt)
* -13% (-352.43) to 2358.59 (1 hour halt)
* -20% (-542.20) to 2168.82 (done for the day)

[curbina]

Crude Oil
I have been short on Crude Oil since March 5, 2020. Still looking for more down side movement.

Oil Falls Into $20 Range As The Fed Cuts Interest Rates To Zero
https://oilprice.com/Energy/Oil-Prices/Oil-Nears-20-Range-Despite-0-Interest-Rates.html

Goldman Sachs: Prepare For $20 Oil
https://oilprice.com/Energy/Energy-General/Goldman-Sachs-Prepare-For-20-Oil.html

[The Hippie Satan of Hyperbole]

The good news is that Heisey's Apple prediction might finally come true!

[curbina]

Viral Spiral Playbook: Navigating The Bear Market
https://www.koyfin.com/research/2020/03/16/viral-spiral-coronavirus-impact-on-stocks/

[TSmith34, Inc.]

I mean, you had stocks trading at historically high multiples that were then hit by a black swan event.  Fed rate cuts are a blunt tool that is going to have a limited impact IMO.  I think it would be much more useful to provide stimulus rebates, i.e., checks directly to individuals as was done in 2008.  Businesses don't have any reason to use cheap funds to expand in the midst of this situation, but individuals that are out of work will certainly spend it.

[MU82]

I mean, you had stocks trading at historically high multiples that were then hit by a black swan event.  Fed rate cuts are a blunt tool that is going to have a limited impact IMO.  I think it would be much more useful to provide stimulus rebates, i.e., checks directly to individuals as was done in 2008.  Businesses don't have any reason to use cheap funds to expand in the midst of this situation, but individuals that are out of work will certainly spend it.

Two black swan events, actually. Had the coronavirus not been a thing, the Saudi-Russia oil battle would be dominating financial headlines.

Otherwise, agree totally with what you say.

Over the years, increased unemployment benefits have been a great financial stimulus because these folks immediately put the money back into the economy. Unemployment is low now, but the point is the same -- give people in need money to spend right now. Don't give it to corporations who will pocket it, invest it, use it for long-term acquisitions, use it for buybacks, etc.

[jesmu84]

Two black swan events, actually. Had the coronavirus not been a thing, the Saudi-Russia oil battle would be dominating financial headlines.

Otherwise, agree totally with what you say.

Over the years, increased unemployment benefits have been a great financial stimulus because these folks immediately put the money back into the economy. Unemployment is low now, but the point is the same -- give people in need money to spend right now. Don't give it to corporations who will pocket it, invest it, use it for long-term acquisitions, use it for buybacks, etc.

That's all we ever do.

You really want people to stay home? Don't make them stress about paying their bills temporarily. Give individuals money.

[Frenns Liquor Depot]

I mean, you had stocks trading at historically high multiples that were then hit by a black swan event.  Fed rate cuts are a blunt tool that is going to have a limited impact IMO.  I think it would be much more useful to provide stimulus rebates, i.e., checks directly to individuals as was done in 2008.  Businesses don't have any reason to use cheap funds to expand in the midst of this situation, but individuals that are out of work will certainly spend it.

One thing this does, is basically pass the baton back to the legislators and force their hand.  Nobody can scapegoat the FED now that they took this action.  We now need direct political action/intervention.

[curbina]

I mean, you had stocks trading at historically high multiples that were then hit by a black swan event.  Fed rate cuts are a blunt tool that is going to have a limited impact IMO.  I think it would be much more useful to provide stimulus rebates, i.e., checks directly to individuals as was done in 2008.  Businesses don't have any reason to use cheap funds to expand in the midst of this situation, but individuals that are out of work will certainly spend it.

The market turn down was not a “black swan event.” Market Long-term indicators were very overbought and they warn us weeks before the correction.

[GooooMarquette]

The market turn down was not a “black swan event.” Market Long-term indicators were very overbought and they warn us weeks before the correction.

The covid-19 crisis is a black swan event, which accelerated/amplified any market turndown that might have otherwise occurred