Good morning. Futures are tumbling on April Fools with the SPY some $15 lower than it was at this time yesterday. The wild market action this year has been no joke.
I'm seeing a lot of talk on financial media, twitter, and new networks about the market with many saying the worse is yet to come and some saying the bottom is in.
My thoughts? The velocity of this move has been unprecedented, From record highs to bear market in weeks. Wow. We always knew this market was stairs up, elevator down. But this elevator moved with unprecedented speed.
The entire global economic engine has been turned off until this virus passes. The bears could have not scripted a more dire event to validate their 10 years of bearishness. And yet here we sit some 5% ABOVE the December 2018 lows.
Governments and Central Banks are attacking this virus with more money than we've ever seen before. Trillions upon trillions of stimulus. Infinite QE.
The market still is in disbelief and I think what we are seeing is uncertainty. When will this Virus end. What implications are we looking at in the months and years ahead.
To cut to the chase... I think the cats out of the bag. Yesterdays presser at the White house has the medical experts predicting up to 240k deaths in the U.S. The economic implications to be determined. But clearly companies that were vibrant just weeks ago, will be no more.
Those that survive this Virus will be stronger than ever.
My thoughts are... as long as this Virus acts as they are anticipating, this market has bottomed on March 23. How appropriate would that be to have another March bottom?
One thing is certain, after the biggest bull market of our lifetimes, this pull back was LONG overdue. Who knows how much longer the gains would have went on. The market was even rallying to new record highs after the Virus started in China. Amazing.
We will exit this CoronaCrash with companies more equipped for the next one. That is good.
As I said last week... this move lower was like a big forest fire. It's painful to watch, but the ground is more fertile in the months ahead. And new growth starts almost as quickly as the old growth turns to ash.
Yes... the market will remain jumpy. Up 3% down 3% are the norms for a while longer. But I think there is a good chance we are past the worst of the panic and fear.
...to be continued (opening bell cometh)