‘From Meltdown To Stock Bubble In A Matter Of Weeks’: Market Marvels At New Mania

‘From Meltdown To Stock Bubble In A Matter Of Weeks’: Market Marvels At New Mania

"That this is all happening during one of the biggest economic crises and collapses in profitability in living memory is incredible", SocGen's Andrew Lapthorne marveled, in a Monday note. Andrew isn't one to mince words, although he's not quite as animated as his famous (in the world of bears, anyway) colleague Albert Edwards. Lapthorne's Monday note carries the title "From market meltdown to stock market bubble in a matter of weeks". He's correct, of course. It is incredible and it is a bubbl
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11 thoughts on “‘From Meltdown To Stock Bubble In A Matter Of Weeks’: Market Marvels At New Mania

  1. Thanks for the BoA chart. Finding the “salient” charts is never easy, despite my including this adjective in my Google search phrases.

    Not sure how Italy, and Germany second, can be so up there considering they just started last week, when the EURUSD exploded out of nowehre. There’s an asterisk. Could just be commitments, promised, kind of like funding letters from government agencies saying they approve your research proposal.

    Thanks for the hat tip on the buyback blackout.

    1. This is a good question. I’ve never thought retail, even with new RH’ers and professionals at home could really move the needle that much in stocks and options, but who knows.

    2. The brokers are all busy. These “unprecedented times,” as they say when you contact them and they explain the long wait times, could mean a large influx of new traders looking for options (in the sense of alternatives) in moving forward without the same jobs they had before. And with the market going up, those on the sidelines who already have trading accounts don’t want to be left out.

  2. Weeks and months of what I thought of weeks and just a few months ago has happened in days. I feel like I have had an inside track with Heisenberg Report. You know what has been going on and on many levels of thinking as quickly as this has all been happening. It all has a feel of we are somewhere for the moment.
    Politically, socially, medically, economically…….what a whirlwind. Live long enough and…..always more.
    Thanks.

    1. I am sure they will be coming soon, but I don’t wonder what Bill Dudley, former chief economist for Goldman and former president of the NY Fed, suggested that the Fed start charging risk premiums based upon the risk associated with trades and trading strategies because as of now the Fed looks more and more like an insurance company that doesn’t charge premiums. Just like car insurance premiums could be tiered, which may direct traders toward activities that have less of a chance of melting down the entire system. Now that an activist Fed is here to stay it will need to change how it interacts with markets to address moral hazard, adverse selection and free riding problems, all of which raise transaction costs and facilitate misdirecting capital.

  3. The June quarter earnings releases should be very interesting- not because of the actual results (which will mostly be awful) but because of what management says about the rest of 2020. By the time the June quarter earnings are released (end of July through mid- August), management will have enough of an idea about the recovery to provide some guidance….unless they “punt” again.

  4. I found this website really insightful it tracks how many users in Robinhood (used primarily by Millenials and Gen Z) are buying what stocks… there are some very clear correlation of price and demand movements on certain stocks:
    http://robintrack.net/popularity_changes

    2 generations that barely experienced a recession or a crash and have a buy the dip mentality (sponsored by the Federal Reserve).

    1. I have a friend who makes Tom Lee look bearish. He is convinced fractional shares, zero trading fees, and bored gamblers jumping into the stock market will drive markets much higher from here. There are too many people out there that blindly believe nothing can go wrong. Fundamentals will ultimately win and unfortunately tears will fall for many of these new retail buyers.

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