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Sobering.
A fraught week closed on a muted note, as stocks meandered between gains and losses following a string of record-setting (in a bad way) economic data Friday.
Investors were also subjected to still more disconcerting headlines about the state of Sino-US relations.
Mid-week, it looked as though the train was poised to careen clear off the tracks, but equities managed to pull it together on Thursday, and by the time the closing bell sounded on Friday afternoon, this week's loss on the S&P was
Sorry, I know the market is a “forecasting” mechanism (and is always efficient), but we’re way too rich here. Yes, we’re reopening, but businesses are going to come back slowly — and, in many, many case, not at all — and consumer psychology is going to take some time to get back to the irrational exuberance levels of early 2020 — how long is anyone’s guess. Unemployment is likely to stay above 10% for the rest of 2020 and into 2021, earnings forecasts will have to be lowered for many, many industries, and, absent an effective therapeutic or vaccine, the fall and winter will see a resurgence of infections and deaths, as people are forced by weather to spend more time indoors. Will the “markets” ignore all that and look through 150,000 deaths? 200,00? More? I doubt it. And don’t get me started on the impact of the new Cold War on markets. Sobering, indeed.
All it takes is 5 CFO’s to continue buying stock and shorts will be covered on the way up. Never has the markets fate been held in fewer hands I will conjecture.
And unfortunately, as of this morning, 2 of those 5 CFO’s are once again awakening to threats from President Balloonhead (…and they’re probably still trying to figure out just how “recession-proof” their businesses truly are).
Another one is hoping that unemployed people will continue to spend $1,000+ for a new phone every two years.
Yet another is reviewing worker safety upgrade costs that will send operating profits back to $0.
And the last one is probably doing just fine, enjoying a nice cup of Starbucks while watching the ferries cross the Sound.
Left unstated in my post is how this parallels the efforts of bankers JP Morgan? (the man) to keep the good times rolling in 1929.
Fantastic comment Prestwick! Made me laugh. But even that 5th CEO is considering the fact that he needs the 499 in the S&P 500, not to mention every Mom & Pop business in the world to keep paying their Office subscription!