After another worst session since 1987 for Dow industrialists
DJIA,
with a fall of 3000 points, green lit the screens this morning
Behind this hides great hopes from investors that governments will throw the kitchen sink against the new coronavirus, the United States to deploy a big stimulus plan. Either way, most expect wild market swings to be with us for some time.
“A key comparison from 2008 that we tend to overlook is that during the Lehman crash outside the financial sector, life went on. In essence, restaurants have taken reservations; taxis went for walks, the shops were always busy. This time around the world is on the verge of closing, ”said Stephen Innes, chief market strategist at AxiCorp.
Our call of the day comes from a forecaster who escaped this bear market by quitting 90% of stocks before the virus started to invade the world, after warning months before of too much optimism for stocks. Yves Lamoureux, president of the macroeconomic research firm Lamoureux & Co., who correctly predicted a panic event in 2018, now sees a series of bear markets coming.
He started talking about what he calls a global financial crisis 2.0 in late October 2019, then started selling stocks in December, leaving him with only “a few good ideas” in late January.
“I think after 10 years of taking steroids, I would say that this market is very fragile. I was looking for something to transform the bull market. The virus was the needle that stung the bubble,” says Lamoureux.
He thinks the markets could be nearing the end of the current liquidation – even if it will expose over-indebted businesses and consumers – and this should open up opportunities for selective business selection. But it is not finished.
“We will have another [selloff] next year and another in 2022, so I expect three big waves down. They are going to be followed by big rebounds and these things should be caused by waves of infection, “he said. Lamoureux, who says he studied microbiology at Concordia University, thinks the virus could reappear more aggressively several times, hitting stocks over and over again.
As for the selection of beaten titles, he warns against any purchase, because there is no guarantee of rebound for companies such as airlines. He buys life sciences companies, and one of his main assets is Schrödinger
SDGR,
which creates software that helps pharmaceutical companies test and discover drugs and vaccines. “This is exactly what you need today.”
The market
Dow
YM00,
S&P
ES00,
and Nasdaq
NQ00,
futures are up, but European stocks
SXXP,
are mixed, while Asian markets have mostly fallen. Crude oil
CL00,
also bounces. The Philippines closed their markets, while France cracked down on short sellers – those who profit from wagering on falling stocks.
Table
Saxo Bank chief investment officer Steen Jacobsen shares this picture of past and present bear markets.
Jesper Christiansen
Buzzing
Tesla electric car manufacturer
TSLA,
would have kept his Fremont factory open, like much of San Francisco’s shelter from the virus epidemic.
The first trials of the coronavirus vaccine in the United States began on Monday. Facebook
FB,
Reddit, Google
GOOG,
Microsoft
MSFT,
and its networking group LinkedIn, Twitter
TWTR,
and Google
GOOGL,
YouTube partners to fight COVID-19 misinformation.
February retail sales, industrial production, job openings, an index of home builders and business inventories are ahead.
The quote
“We are at war.” – French President Emmanuel Macron declares war on the coronavirus epidemic while his country joins the blockages observed elsewhere in Europe.
Random readings
Happy Saint Patrick
Editors are scrambling to find answers after Monday’s stock collapse.
Tom Hanks apparently got out of the hospital, while another Hollywood star now has the new coronavirus.
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