‘The Worse COVID Gets, The Better The Markets Do’ (A Misleading Story)

On Monday, Reuters ran an extremely rudimentary piece carrying what I can only describe as a deliberately inflammatory headline. "Federal Reserve's $3 trillion virus rescue inflates market bubbles", the title proclaims, as if to suggest there's a scoop involved. For anyone with even a passing interest in markets, the article isn't worth reading, which makes one wonder why it was written in the first place. There are five charts, one showing the juxtaposition between quarterly S&P performan

Try one month of our best daily market and macroeconomic commentary for FREE

Try for free

Or see other subscription options to save 20% on an annual plan

Already have an account? log in

Speak your mind

This site uses Akismet to reduce spam. Learn how your comment data is processed.

5 thoughts on “‘The Worse COVID Gets, The Better The Markets Do’ (A Misleading Story)

  1. ” the tech titans make up ~22% of the S&P’s market cap.”. As of today the five megacaps are closer to 25% than 22%. Just the biggest three are not far from 20%.

  2. Yeah. If we have no mom ‘n’ pops, that is bullish for Amazon and the four retail big box chains we will have left. If Tide replaces all of the local dry cleaners, that is good for Proctor and Gamble. If every restaurant is replaced by Chipotle, etc., etc., etc. If you are politically connected through donations, and have a cost of capital that undercuts all competition through access to the Fed or relevant Special Purpose Vehicles or you have the ability to issue new equity that only goes up, you destroy and subsume all competition.

    And because most Americans are politically literate and cognizant of relevant monetary policy, Congressional appropriations, Fed levering, corporate finance, Treasury regulations, and the like, this 1001-level news article was a totes waste of time…

    1. Do you realize that you are implying we are moving closer to the world described in the movie Idiocracy? All markets are dominated by a single franchise. All food comes from Carl’s Jr. All hydration is Brawndo. Everything is sold by Costco which equates digitally to Amazon. Perhaps that film was more prognostic than I realized.

  3. What is fascinating about the current concentration of pro-equity risk taking in mega tech at the expense of those names which are more cyclical as described in this episode of defensiveness as articulated above, is that it is occurring against a backdrop of economic surprises (CESIUSD) at all time highs which suggests that what plagues the world is a palpable fear about the future, which by the way is backed up by news based economic uncertainty indices.

NEWSROOM crewneck & prints