As everyone is no doubt aware, and to no great surprise, markets were down sharply again on Monday.
Ugh, S&P 500 down 12.0%, Toronto down 9.9%. Oil down as well.
Individual declines are too painful to list.
Looking at futures, I am greatly surprised to see them up 800 points on the DOW. Apparently futures hit limit up. This after Donald Trump tweeted: “The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!”
Well, we have seen that moves by the FED to support the market have pushed it up. Also optimistic words from Trump have at times pushed it up. But the effect has so far been quite temporary. Trump should probably have waited to tweet that in the morning. As it is, that could be old news by morning.
I see little good news on the virus front. China new cases remain low. Italy may have been down slightly as in 3200 latest day versus about 3500 the two previous days. Too early to say if they have managed to finally peak in new daily cases. South Korea had 158 new cases so not progressing quite as well as it looked yesterday.
My province, Alberta had 18 new cases. That was probably to be expected because there is a lot of testing going on. Hopefully testing and isolation and social distancing and travel bans will mean the provinces peak in new cases soon.
All of North America is ramping up social isolation moves. That will definitely slow the spread. But it remains to be seen if we can contain the spread before it gets much higher.
Fear surely continues to rise as things close and the seriousness of the matter hits home.
With the large parts of the economy shutting down and with all this fear, it seems likely that markets continue to go down.
Selling, especially on rallies may be the most prudent move.
I sold some things today. I have always been over-exposed to equities and I knew that was a risk. I feel I need to salvage some cash in case the decline goes deeper. Everyone’s situation is different depending on many things including the asset allocation, age, income, job security and many other things.
We are simply in uncharted waters and no one knows where all of this is headed.
I am sorry that I can’t offer more optimistic thoughts than that.
The FED and central bankers can try to keep markets up. But surely there is a limit to what they can do.
In better news Amazon is apparently hiring 100,000 to keep up with demand and of course Costco is going gangbusters. That may or may not last.
I think it all depends on the virus, stopping the spread and finding vaccines.