Almost every market has recouped at least 50% of its Covid-19 losses. Some markets, like investment-grade credit, have regained at least 80%. So where do we go from here?
If you Have listened to any news source on the last week. You’ll note that Covid cases are on the rise in states that are reopening. Personally, I’m not surprised. I believe their would always be an increase in cases, but after witnessing the public’s lack of respect for the disease I’m not going to be surprised if we need a second lockdown.
I don’t want to get on my soapbox and preach about politics, but there’s a group of Americans that blatantly ignoring basic human decency and are failing to follow any precautions.
I believe this will translate another downturn in the markets. As you can see the VXX has been creeping up while the SPY in bouncing around this no mans land looking for a direction.
VXX
SPY
With this news I’m thinking the reopening will not be as smooth as the market has hoped. Apple just announced they will be closing stores that are in areas where the covid trend is increasing. I don’t think this will be an isolated event and if other companies start closing again that’s going to make a real impact economically.
I’ll be setting up some bearish trades as the science is. It looking great.
I think we are going to need to see some more lock downs before this is all over. Lot's of people were giving our governor a hard time, but she was really just trying to be smart about the whole thing and try to open as slowly and cautiously as possible. It would have been good if the federal government and the local governments could have worked together to have more of a plan. For example governors say "I know it sucks that we have to be closed and you have to be out of work, but the federal government is working together to provide help for you during this time". Instead there has just been name-calling, fighting, and bickering.
Exactly the lack of a federal response undermined any state responses... I’m worried that without different federal leadership this is going to be a drawn out process. I’m also noticing that the public is not responsible enough to take care of themselves. Just because you want a hair cut or to go to the beach is irrelevant to covid. If you choose to do these things the least people can do is wear a mask and stay 6 ft apart, but that’s not happening...
I agree. It feels like it is going to be a never ending no-win situation for all of us!
I knew we could agree on more than just beer lol.
😄
#posh proof of share on Twitter:
By markets do you mean the whole economy or just the stock markets?
Stocks my friend.
Hmm,probably a temporary recovery, imho.