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Market Bottoms
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Dow Theory:
Under Dow’s theory the primary trend, once authoritatively established as bullish, is considered to be continuing in force until negated by a confirmed bearish indication such as would be the case when, after a reaction of full secondary proportions in a bull market, a rally fails to lift both averages to new high ground, and a later decline carries both averages below the preceding secondary low.”
William Peter Hamilton – “The movement of both the railroad (now the Transports) and industrial stock averages should always be considered together. The movement of one price average must be confirmed by the other before reliable inferences may be drawn. Conclusions based upon the movement of one average, unconfirmed by the other, are almost certain to prove misleading.”
William Peter Hamilton – “Dow’s theory stipulates for a confirmation of one average by the other. This constantly occurs at the inception of a primary movement, but is anything but consistently present when the market turns for a secondary swing.”
William Peter Hamilton – “When one breaks through an old low level without the other, or when one establishes a new high for the short swing, unsupported, the inference is almost invariably deceptive.”
William Peter Hamilton – “Indeed it may be said that a new high or a new low by one of the averages unconfirmed by the other has been invariably deceptive. New high or low points for both have preceded every major movement since the averages were established.”
William Peter Hamilton – “The two averages may vary in strength, but they will not vary materially in direction especially in a major movement. Throughout all the years in which both averages have been kept, this rule has proved entirely dependable. It is not only true in the major swings of the market, but it is approximately true of the secondary actions and rallies. It would not be true of the daily fluctuations, and it might be utterly misleading so far as individual stocks are concerned.”
Robert Rhea – “The most useful part of the Dow theory, and the part that must never be forgotten for even a day, is the fact that no price movement is worthy of consideration unless the movement is confirmed by both averages.”
Robert Rhea – “The Dow theory deals exclusively with the movement of the railroad and industrial stock averages, and any other method would not be Dow’s theory as expounded by Hamilton.”
Robert Rhea – “A wise man lets the market alone when the averages disagree.”
Robert Rhea – “When the averages disagree they are shouting ‘be careful’.”
jog on
duc
Under Dow’s theory the primary trend, once authoritatively established as bullish, is considered to be continuing in force until negated by a confirmed bearish indication such as would be the case when, after a reaction of full secondary proportions in a bull market, a rally fails to lift both averages to new high ground, and a later decline carries both averages below the preceding secondary low.”
William Peter Hamilton – “The movement of both the railroad (now the Transports) and industrial stock averages should always be considered together. The movement of one price average must be confirmed by the other before reliable inferences may be drawn. Conclusions based upon the movement of one average, unconfirmed by the other, are almost certain to prove misleading.”
William Peter Hamilton – “Dow’s theory stipulates for a confirmation of one average by the other. This constantly occurs at the inception of a primary movement, but is anything but consistently present when the market turns for a secondary swing.”
William Peter Hamilton – “When one breaks through an old low level without the other, or when one establishes a new high for the short swing, unsupported, the inference is almost invariably deceptive.”
William Peter Hamilton – “Indeed it may be said that a new high or a new low by one of the averages unconfirmed by the other has been invariably deceptive. New high or low points for both have preceded every major movement since the averages were established.”
William Peter Hamilton – “The two averages may vary in strength, but they will not vary materially in direction especially in a major movement. Throughout all the years in which both averages have been kept, this rule has proved entirely dependable. It is not only true in the major swings of the market, but it is approximately true of the secondary actions and rallies. It would not be true of the daily fluctuations, and it might be utterly misleading so far as individual stocks are concerned.”
Robert Rhea – “The most useful part of the Dow theory, and the part that must never be forgotten for even a day, is the fact that no price movement is worthy of consideration unless the movement is confirmed by both averages.”
Robert Rhea – “The Dow theory deals exclusively with the movement of the railroad and industrial stock averages, and any other method would not be Dow’s theory as expounded by Hamilton.”
Robert Rhea – “A wise man lets the market alone when the averages disagree.”
Robert Rhea – “When the averages disagree they are shouting ‘be careful’.”
jog on
duc
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Returns in previous bears.
Bond, James Bond.
jog on
duc
Bond, James Bond.
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duc
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So this is the anatomy of this crash and how you could have seen it coming.
23/24 Feb. 2020, US Stock Market sells off;
24 Feb. US$ sells off.
24 Feb. Japanese Yen moves higher.
The yen’s unique properties in times of turmoil stem from the influence of Japan’s ultra-low interest rates (current benchmark rate: 0.5%). In normal times, that encourages investors to borrow in yen and buy pretty much anything else, from Brazilian stocks to Icelandic bonds to Australian short-term paper.
When volatility increases or investors have to cover losses elsewhere, they unwind these maneuvers – called “carry trades” – and buy back the yen. That kind of unwind has gathered speed in recent weeks. What’s more, investors who aren’t involved in carry trades may be turning to the relative liquidity of the currency markets in search of a hedge as losses in other investments multiply.
The yen does “offer some protection,” says Jens Nordvig, a currency strategist at Goldman Sachs. “It tends to go in the right direction when things go really badly.”
Of course, when things look up, the yen immediately changes tack: it weakened rapidly against the dollar this afternoon as stocks took off.
This article actually dates from 2008. Exactly the same thing happened back then.
9 March Japanese Yen tops out
9 March US$ bottoms out
MBS sell off
23 March US Stocks bottom
23 March US$ x2 top
23 March Yen x3 bottom
23 March MBS huge up day
23 March Congress discuss bailout
Charts of the above
Stocks
Yen
Dollar
Last time, the initial bailout was rejected:
We all know what happened next.
As stated at the start of the post, an investor could have been at least prepared for this from January. Now, had they also been watching for the 'carry trade' early warning, they could likely have got out almost as quickly as Mr Skate's GTFO indicator. But this is for another post.
jog on
duc
23/24 Feb. 2020, US Stock Market sells off;
24 Feb. US$ sells off.
24 Feb. Japanese Yen moves higher.
The yen’s unique properties in times of turmoil stem from the influence of Japan’s ultra-low interest rates (current benchmark rate: 0.5%). In normal times, that encourages investors to borrow in yen and buy pretty much anything else, from Brazilian stocks to Icelandic bonds to Australian short-term paper.
When volatility increases or investors have to cover losses elsewhere, they unwind these maneuvers – called “carry trades” – and buy back the yen. That kind of unwind has gathered speed in recent weeks. What’s more, investors who aren’t involved in carry trades may be turning to the relative liquidity of the currency markets in search of a hedge as losses in other investments multiply.
The yen does “offer some protection,” says Jens Nordvig, a currency strategist at Goldman Sachs. “It tends to go in the right direction when things go really badly.”
Of course, when things look up, the yen immediately changes tack: it weakened rapidly against the dollar this afternoon as stocks took off.
This article actually dates from 2008. Exactly the same thing happened back then.
9 March Japanese Yen tops out
9 March US$ bottoms out
MBS sell off
23 March US Stocks bottom
23 March US$ x2 top
23 March Yen x3 bottom
23 March MBS huge up day
23 March Congress discuss bailout
Charts of the above
Stocks
Yen
Dollar
Last time, the initial bailout was rejected:
We all know what happened next.
As stated at the start of the post, an investor could have been at least prepared for this from January. Now, had they also been watching for the 'carry trade' early warning, they could likely have got out almost as quickly as Mr Skate's GTFO indicator. But this is for another post.
jog on
duc
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So from Oaktree:
Before I close, just a word on market bottoms. Some of the most interesting questions in investing are especially appropriate today: “Since you expect more bad news and feel the markets may fall further, isn’t it premature to do any buying? Shouldn’t you wait for the bottom?”
To me, the answer clearly is “no.” As mentioned earlier, we never know when we’re at the bottom. A bottom can only be recognized in retrospect: it was the day before the market started to go up. By definition, we can’t know today whether it’s been reached, since that’s a function of what will happen tomorrow. Thus, “I’m going to wait for the bottom” is an irrational statement.
If you want, you might choose to say, “I’m going to wait until the bottom has been passed and the market has started upward.” That’s more rational. However, number one, you’re saying you’re willing to miss the bottom. And number two, one of the reasons for a market to start to rise is that the sellers’ sense of urgency has abated, and along with it the selling pressure. That, in turn, means (a) the supply for sale shrinks and (b) the buyers’ very buying forces the market upward, as it’s now they who are highly motivated. These are the things that make markets rise. So if investors want to buy, they should buy on the way down. That’s when the sellers are feeling the most urgency and the buyers’ buying won’t arrest the downward cascade of security prices.
Back in 2008, on the heels of Lehman Brothers’ September 15 bankruptcy filing, Bruce Karsh and his team embarked on an unprecedented program to buy the debt of companies in distress. They invested an average of roughly $450 million per week over the last 15 weeks of the year, for a total of nearly $7 billion. Debt prices collapsed throughout that period, and they continued to fall in the first quarter of 2009 (along with the stock market). But because the hedge funds facing withdrawals had been gated – and because the leveraged, securitized vehicles that would melt down had all been liquidated – large amounts ceased to be for sale after year-end. In short, if we hadn’t bought in the fourth quarter, we would have missed our chance.
The old saying goes, “The perfect is the enemy of the good.” Likewise, waiting for the bottom can keep investors from making good purchases. The investor’s goal should be to make a large number of good buys, not just a few perfect ones. Think about your normal behavior. Before every purchase, do you insist on being sure the thing in question will never be available lower? That is, that you’re buying at the bottom? I doubt it. You probably buy because you think you’re getting a good asset at an attractive price. Isn’t that enough? And I trust you sell because you think the selling price is adequate or more, not because you’re convinced the price can never go higher. To insist on buying only at bottoms and selling only at tops would be paralyzing.
On the contrary, I gave this memo the title Calibrating because of my view that a portfolio’s positioning should change over time in response to what’s going on in the environment. As the environment becomes more precarious (with prices high, risk aversion low and fear lacking), a portfolio’s defensiveness should be increased. And as the environment becomes more propitious (with prices low, risk aversion high and fear prevalent), its aggressiveness should be ramped up. Clearly, this process is one of gradual readjustment, not a matter of all-or-nothing. It shouldn’t be the goal to do this only at bottoms and tops.
So it’s my view that waiting for the bottom is folly. What, then, should be the investor’s criteria? The answer’s simple: if something’s cheap – based on the relationship between price and intrinsic value – you should buy, and if it cheapens further, you should buy more.
I don’t want to give the impression that it’s easy to buy while prices are tumbling. It isn’t, and in 2008, Bruce and I spent a lot of time supporting each other and debating whether we were buying too fast (or too slow). The news was terrible, and for a good while it seemed as if the vicious circle of financial institution meltdowns would continue unchecked. Terrible news makes it hard to buy and causes many people to say, “I’m not going to try to catch a falling knife.” But it’s also what pushes prices to absurdly low levels. That’s why I so like the headline from Doug Kass that I referred to above: “When the Time Comes to Buy, You Won’t Want To.” It’s not easy to buy when the news is terrible, prices are collapsing and it’s impossible to have an idea where the bottom lies. But doing so should be the investor’s greatest aspiration.
As for the current episode, here’s some data from Gavekal Research’s Monthly Strategy piece for April, bearing on the question of whether the bottom was passed in March:
. . . markets rarely clear after one massive decline. In 15 bear markets since 1950, only one did not see the initial major low tested within three months . . . In all other cases, the bottom has been tested once or twice. Since news-flow in this crisis will likely worsen before it improves, a repeat seems likely.
And here’s some data from my son Andrew regarding the movements of the S&P 500 index around the time of the last two big crises. The first and second declines were followed by substantial rallies . . . which then gave way to even bigger declines:
And a chart for you to ponder:
jog on
duc
Before I close, just a word on market bottoms. Some of the most interesting questions in investing are especially appropriate today: “Since you expect more bad news and feel the markets may fall further, isn’t it premature to do any buying? Shouldn’t you wait for the bottom?”
To me, the answer clearly is “no.” As mentioned earlier, we never know when we’re at the bottom. A bottom can only be recognized in retrospect: it was the day before the market started to go up. By definition, we can’t know today whether it’s been reached, since that’s a function of what will happen tomorrow. Thus, “I’m going to wait for the bottom” is an irrational statement.
If you want, you might choose to say, “I’m going to wait until the bottom has been passed and the market has started upward.” That’s more rational. However, number one, you’re saying you’re willing to miss the bottom. And number two, one of the reasons for a market to start to rise is that the sellers’ sense of urgency has abated, and along with it the selling pressure. That, in turn, means (a) the supply for sale shrinks and (b) the buyers’ very buying forces the market upward, as it’s now they who are highly motivated. These are the things that make markets rise. So if investors want to buy, they should buy on the way down. That’s when the sellers are feeling the most urgency and the buyers’ buying won’t arrest the downward cascade of security prices.
Back in 2008, on the heels of Lehman Brothers’ September 15 bankruptcy filing, Bruce Karsh and his team embarked on an unprecedented program to buy the debt of companies in distress. They invested an average of roughly $450 million per week over the last 15 weeks of the year, for a total of nearly $7 billion. Debt prices collapsed throughout that period, and they continued to fall in the first quarter of 2009 (along with the stock market). But because the hedge funds facing withdrawals had been gated – and because the leveraged, securitized vehicles that would melt down had all been liquidated – large amounts ceased to be for sale after year-end. In short, if we hadn’t bought in the fourth quarter, we would have missed our chance.
The old saying goes, “The perfect is the enemy of the good.” Likewise, waiting for the bottom can keep investors from making good purchases. The investor’s goal should be to make a large number of good buys, not just a few perfect ones. Think about your normal behavior. Before every purchase, do you insist on being sure the thing in question will never be available lower? That is, that you’re buying at the bottom? I doubt it. You probably buy because you think you’re getting a good asset at an attractive price. Isn’t that enough? And I trust you sell because you think the selling price is adequate or more, not because you’re convinced the price can never go higher. To insist on buying only at bottoms and selling only at tops would be paralyzing.
On the contrary, I gave this memo the title Calibrating because of my view that a portfolio’s positioning should change over time in response to what’s going on in the environment. As the environment becomes more precarious (with prices high, risk aversion low and fear lacking), a portfolio’s defensiveness should be increased. And as the environment becomes more propitious (with prices low, risk aversion high and fear prevalent), its aggressiveness should be ramped up. Clearly, this process is one of gradual readjustment, not a matter of all-or-nothing. It shouldn’t be the goal to do this only at bottoms and tops.
So it’s my view that waiting for the bottom is folly. What, then, should be the investor’s criteria? The answer’s simple: if something’s cheap – based on the relationship between price and intrinsic value – you should buy, and if it cheapens further, you should buy more.
I don’t want to give the impression that it’s easy to buy while prices are tumbling. It isn’t, and in 2008, Bruce and I spent a lot of time supporting each other and debating whether we were buying too fast (or too slow). The news was terrible, and for a good while it seemed as if the vicious circle of financial institution meltdowns would continue unchecked. Terrible news makes it hard to buy and causes many people to say, “I’m not going to try to catch a falling knife.” But it’s also what pushes prices to absurdly low levels. That’s why I so like the headline from Doug Kass that I referred to above: “When the Time Comes to Buy, You Won’t Want To.” It’s not easy to buy when the news is terrible, prices are collapsing and it’s impossible to have an idea where the bottom lies. But doing so should be the investor’s greatest aspiration.
As for the current episode, here’s some data from Gavekal Research’s Monthly Strategy piece for April, bearing on the question of whether the bottom was passed in March:
. . . markets rarely clear after one massive decline. In 15 bear markets since 1950, only one did not see the initial major low tested within three months . . . In all other cases, the bottom has been tested once or twice. Since news-flow in this crisis will likely worsen before it improves, a repeat seems likely.
And here’s some data from my son Andrew regarding the movements of the S&P 500 index around the time of the last two big crises. The first and second declines were followed by substantial rallies . . . which then gave way to even bigger declines:
And a chart for you to ponder:
jog on
duc
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All good, but what does one see as reasonable value?
Correlation between transport and share price is not exactly positive is it?
Depression are different from market crash as it affect the underlying economy
So while i do buy what i see as bargain.mostly overseas: BP Exon
I do not see that much to be crazy of here?
Banks? Companies selling now at 2016 prices?
Miners with reduced demand both structurally and economic cycle wise?
Great posts.
There seems to be a profound economic case for a new low. There is almost a consensus on that. Because of that, I am thinking that the low is probably in. The market is good at wrecking consensus.
I started buying over the last 2 weeks but keeping some powder dry because wtfk?
There seems to be a profound economic case for a new low. There is almost a consensus on that. Because of that, I am thinking that the low is probably in. The market is good at wrecking consensus.
I started buying over the last 2 weeks but keeping some powder dry because wtfk?
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So when we have market meltdowns, particularly where they are quite fast so that the fundamentals are a guestimate moving forward (earnings), I don't buy individual stocks. I buy ETFs. I particularly like leveraged ETFs. I also like Close Ended Funds with big dividends, particularly if they have a consistent manager (ethos).
So I have bought: ERX, FAS, GGT, DFEN all at pretty close to the bottom. Only ERX is still showing a loss, got caught by the Arabs declaring a price war.
If you are going to buy individual stocks, then:
(a) Low P/B value (replacement cost of assets) that have in the past demonstrated high ROE (+15%);
(b) Low debt (allows debt to be added if required);
(c) High Quick/Current ratios (cash to stay in business/current liabilities);
(d) I like a high dividend (only if it frees up cash if it is cut).
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duc
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(a) Everyone and their granny pretty much knows that there is likely to be a recession triggered. This is priced in and not news. Positions being taken over the last week already have that priced in, therefore, it will take something 'new and bad' to push the market lower.
(b) The banks are weathering the storm well (so far). A serious issue develops out of nowhere with the financial system (banking) and that could constitute new and bad. At this point, the issue would have been their loan books, but with the Fed backstopping them, unlikely.
(c) We know bankruptcies will run up. Meh. The US has Chapter 11, they deal with this well and in any case it's not news.
(d) The virus will burn itself out over time. A vaccine or treatment will be developed. Over.
(e) Headlines will lose their ability to scare.
So as traders/investors we follow our plan. These opportunities crop up rarely, 10yrs between drinks is a while. Make the most of it. No need to be reckless, just follow your plan.
$1M spread across 10-20 positions at a 20%+ dividend yield gives a nice passive cash-flow going forward, particularly if those dividends grow over time.
jog on
duc
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I noticed you invest mostly in the US which gives you currency leverage and away from the scariest australian specific outlook
You have quite a valid view, a bit worried about leverage etf
You raised my interest in dfen and actually bpugh dome dn march but sold at a loss when i learned about the managing fund changing the multiplicator rules out of the blue on some of their similar ETFs
Will look at the others ETFs
You have quite a valid view, a bit worried about leverage etf
You raised my interest in dfen and actually bpugh dome dn march but sold at a loss when i learned about the managing fund changing the multiplicator rules out of the blue on some of their similar ETFs
Will look at the others ETFs
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1. Pretty much 100% US
2. The leverage is (generally) fine. In real dislocations, sometimes they get a bit loose and unhinged.
3. Look at FAS:
Some real quality in there, all jumping around x3. FAS has been around at least 10yrs, probably longer. Made it through the 2007-2009 mess and performing nicely this time round also.
Gotta love this one!
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duc
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There seems to be a consensus that there will be a recession. Agreed. Do all recessions result in a bear market?
So in '53-'54, it did not.
In '57-'58, yes it did.
In 1960, yes it did.
End of '68-'69 into 1970 yes it did (see next chart).
Continued from previous.
What is noticeable is that bull rallies launched out of the recessions long before the recessions completed.
The other point worth noting is that often, the recession and bear start more or less at the same time (this could be hindsight though as the recessions are often plotted retrospectively).
Again, market comes out of bear long before recession resolves.
Not sure what happened on this one, but you get the idea.
Obviously we are going to incur a recession. The market will not however stay in bear mode for the duration of the recession. It could well be choppy, I'd be surprised if it wasn't, lots of negativity out there for sure. Markets (however) tend to look at causes rather than outcomes. When the cause is resolved, even though the outcomes linger...markets are off and running again.
jog on
duc
So in '53-'54, it did not.
In '57-'58, yes it did.
In 1960, yes it did.
End of '68-'69 into 1970 yes it did (see next chart).
Continued from previous.
What is noticeable is that bull rallies launched out of the recessions long before the recessions completed.
The other point worth noting is that often, the recession and bear start more or less at the same time (this could be hindsight though as the recessions are often plotted retrospectively).
Again, market comes out of bear long before recession resolves.
Not sure what happened on this one, but you get the idea.
Obviously we are going to incur a recession. The market will not however stay in bear mode for the duration of the recession. It could well be choppy, I'd be surprised if it wasn't, lots of negativity out there for sure. Markets (however) tend to look at causes rather than outcomes. When the cause is resolved, even though the outcomes linger...markets are off and running again.
jog on
duc
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Earnings season kicks off next week in the US. Depending on how bad it is, this is where, if there is going to be a pullback, it could occur. We start with some of the big banks. But also in there we have rail transport (KSU) and on retail JNJ.
Earnings spotlight: Johnson & Johnson (NYSE:JNJ), Fastenal (NASDAQ:FAST), Conn's (NASDAQ:CONN) and Amarin (NASDAQ:AMRN), JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) on April 14; Bank of America (NYSE:BAC), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), PNC Financial (NYSE:PNC) UnitedHealth (NYSE:UNH) and Bed Bath & Beyond (NASDAQ:BBBY) on April 15; Abbott (NYSE:ABT), Rite Aid (NYSE:RAD), BlackRock (NYSE:BLK), Bank of New York (NYSE:BK), KeyCorp (NYSE:KEY) on April 16; Kansas City Southern (NYSE:KSU), Schlumberger Limited (NYSE:SLB) and Regions Financial (NYSE:RF) on April 17.
Along with the banks we have the credit card divisions of banks and charge offs on credit cards. With US unemployment going through the roof, this could also be a market mover if it is worse than expected. What's expected? Bad. If it's truly woeful, could get choppy in financials (FAS).
There are also updates on Biotech and their progress towards a vaccine. Any positive news out of any of these and the market could turn very bullish.
COVID-19 vaccines and treatments: As clinical trials related to COVID-19 continue to ramp up, the focus next week will start to shift on which vaccines and treatments have the best chance to make it to mass production. There has been a lot of discussion about Gilead Sciences' (NASDAQ:GILD) remdesivir, Regeneron Pharmaceuticals' (NASDAQ:REGN) cocktail antibodies and Moderna's (NASDAQ:MRNA) vaccine candidate. Other companies racing ahead with vaccine trials at various stages include BioNTech (NASDAQ:BNTX), Pfizer (NYSE:PFE), Dynavax Technologies (NASDAQ:DVAX), Vaxart (NASDAQ:VXRT), GlaxoSmithKline (NYSE:GSK), Heat Biologics (NASDAQ:HTBX), Inovio Pharmaceuticals (NASDAQ:INO), Translate Bio (NASDAQ:TBIO), Johnson & Johnson, Arcturus Therapeutics (NASDAQ:ARCT), CSL Behring and Novavax (NASDAQ:NVAX). Treatment candidates are being worked on by privately-held CalciMedica, Amgen (NASDAQ:AMGN), Adaptive Biotechnologies (NASDAQ:ADPT), Takeda Pharmaceutical (NYSE:TAK), CytoDyn (OTCQB:CYDY), Roche Holdings (OTCQX:RHHBY), Regeneron Pharmaceuticals, Tiziana Life Sciences (NASDAQ:TLSA), Vir Biotechnology (NASDAQ:VIR), Eli Lilly (NYSE:LLY), Sanofi (NASDAQ:SNY) and more.
Spotlight on Moderna: Moderna (MRNA) will host its Vaccine Day on April 14. Presentations from CEO Stéphane Bancel, Chief Medical Officer Tal Zaks and key opinion leaders will focus on mRNA vaccines and the company's core prophylactic vaccines modality.
Biotech news will be everywhere and watched really closely. Hints of a solution to COVID....well an already crazy volatile sector could become even more so.
Virtual biotech conferences: The Needham and Company 19th Annual Healthcare Conference is going to a virtual format. Presentations are expected from Cardiovascular Systems (NASDAQ:CSII), Cara Therapeutics (NASDAQ:CARA), Iterum Therapeutics (NASDAQ:ITRM), Personalis (NASDAQ:PSNL), Invacare (NYSE:IVC), I-Mab (NASDAQ:IMAB), Zealand Pharma (NASDAQ:ZEAL), Altreca (NASDAQ:BCEL), Castle Biosciences (NASDAQ:CSTL), Esperion Therapeutics (NASDAQ:ESPR), Liquidia Technologies (NASDAQ:LQDA), Amphastar Pharmaceuticals (NASDAQ:AMPH), Genocea Biosciences (NASDAQ:GNCA), Trevi Therapeutics (NASDAQ:TRVI), KalVista Pharmaceuticals (NASDAQ:KALV), TrovaGene (NASDAQ:TROV) and X4 Pharmaceuticals (NASDAQ:XFOR).
And from Barron's magazine, the warning that socialism is becoming far more mainstream in the US. With US elections coming up (almost forgotten outside of US) there is a not insignificant risk of a Bernie Saunders victory, if not in person, at least for the policies that he has espoused. This could have a significant impact on a number of market sectors going forward.
Barron's mentions: There is a warning sounded that SoftBank (OTCPK:SFTBF,OTCPK:SFTBY) will need to take painful write-downs for its Vision Fund over the next few weeks. WeWork (WE), Uber (NYSE:UBER) and Oyo Rooms are just a few of the huge investments that have misfired for the fund. Amid the flurry of dividend cuts and payout suspensions, durable utility companies like American Electric Power (NYSE:AEP), Dominion Energy (NYSE:D), FirstEnergy (NYSE:FE) and NextEra Energy (NYSE:NEE) are seen as safety bets for dividend stability.
The cover story this week makes the argument that life won't be the same after the pandemic is over. "The pandemic is reshaping consumer, corporate, and government behavior. Long-held assumptions have been discarded. Deficit hawks have barely made a peep as policymakers spend trillions of dollars to stabilize the economy. Universal health care and social safety nets, once deemed too radical, are getting more mainstream attention," predicts the publications. Battle-tested investors are seen ending up being more cautious in what could be a reversal of the frothy last few years.
jog on
duc
Earnings spotlight: Johnson & Johnson (NYSE:JNJ), Fastenal (NASDAQ:FAST), Conn's (NASDAQ:CONN) and Amarin (NASDAQ:AMRN), JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) on April 14; Bank of America (NYSE:BAC), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), PNC Financial (NYSE:PNC) UnitedHealth (NYSE:UNH) and Bed Bath & Beyond (NASDAQ:BBBY) on April 15; Abbott (NYSE:ABT), Rite Aid (NYSE:RAD), BlackRock (NYSE:BLK), Bank of New York (NYSE:BK), KeyCorp (NYSE:KEY) on April 16; Kansas City Southern (NYSE:KSU), Schlumberger Limited (NYSE:SLB) and Regions Financial (NYSE:RF) on April 17.
Along with the banks we have the credit card divisions of banks and charge offs on credit cards. With US unemployment going through the roof, this could also be a market mover if it is worse than expected. What's expected? Bad. If it's truly woeful, could get choppy in financials (FAS).
There are also updates on Biotech and their progress towards a vaccine. Any positive news out of any of these and the market could turn very bullish.
COVID-19 vaccines and treatments: As clinical trials related to COVID-19 continue to ramp up, the focus next week will start to shift on which vaccines and treatments have the best chance to make it to mass production. There has been a lot of discussion about Gilead Sciences' (NASDAQ:GILD) remdesivir, Regeneron Pharmaceuticals' (NASDAQ:REGN) cocktail antibodies and Moderna's (NASDAQ:MRNA) vaccine candidate. Other companies racing ahead with vaccine trials at various stages include BioNTech (NASDAQ:BNTX), Pfizer (NYSE:PFE), Dynavax Technologies (NASDAQ:DVAX), Vaxart (NASDAQ:VXRT), GlaxoSmithKline (NYSE:GSK), Heat Biologics (NASDAQ:HTBX), Inovio Pharmaceuticals (NASDAQ:INO), Translate Bio (NASDAQ:TBIO), Johnson & Johnson, Arcturus Therapeutics (NASDAQ:ARCT), CSL Behring and Novavax (NASDAQ:NVAX). Treatment candidates are being worked on by privately-held CalciMedica, Amgen (NASDAQ:AMGN), Adaptive Biotechnologies (NASDAQ:ADPT), Takeda Pharmaceutical (NYSE:TAK), CytoDyn (OTCQB:CYDY), Roche Holdings (OTCQX:RHHBY), Regeneron Pharmaceuticals, Tiziana Life Sciences (NASDAQ:TLSA), Vir Biotechnology (NASDAQ:VIR), Eli Lilly (NYSE:LLY), Sanofi (NASDAQ:SNY) and more.
Spotlight on Moderna: Moderna (MRNA) will host its Vaccine Day on April 14. Presentations from CEO Stéphane Bancel, Chief Medical Officer Tal Zaks and key opinion leaders will focus on mRNA vaccines and the company's core prophylactic vaccines modality.
Biotech news will be everywhere and watched really closely. Hints of a solution to COVID....well an already crazy volatile sector could become even more so.
Virtual biotech conferences: The Needham and Company 19th Annual Healthcare Conference is going to a virtual format. Presentations are expected from Cardiovascular Systems (NASDAQ:CSII), Cara Therapeutics (NASDAQ:CARA), Iterum Therapeutics (NASDAQ:ITRM), Personalis (NASDAQ:PSNL), Invacare (NYSE:IVC), I-Mab (NASDAQ:IMAB), Zealand Pharma (NASDAQ:ZEAL), Altreca (NASDAQ:BCEL), Castle Biosciences (NASDAQ:CSTL), Esperion Therapeutics (NASDAQ:ESPR), Liquidia Technologies (NASDAQ:LQDA), Amphastar Pharmaceuticals (NASDAQ:AMPH), Genocea Biosciences (NASDAQ:GNCA), Trevi Therapeutics (NASDAQ:TRVI), KalVista Pharmaceuticals (NASDAQ:KALV), TrovaGene (NASDAQ:TROV) and X4 Pharmaceuticals (NASDAQ:XFOR).
And from Barron's magazine, the warning that socialism is becoming far more mainstream in the US. With US elections coming up (almost forgotten outside of US) there is a not insignificant risk of a Bernie Saunders victory, if not in person, at least for the policies that he has espoused. This could have a significant impact on a number of market sectors going forward.
Barron's mentions: There is a warning sounded that SoftBank (OTCPK:SFTBF,OTCPK:SFTBY) will need to take painful write-downs for its Vision Fund over the next few weeks. WeWork (WE), Uber (NYSE:UBER) and Oyo Rooms are just a few of the huge investments that have misfired for the fund. Amid the flurry of dividend cuts and payout suspensions, durable utility companies like American Electric Power (NYSE:AEP), Dominion Energy (NYSE:D), FirstEnergy (NYSE:FE) and NextEra Energy (NYSE:NEE) are seen as safety bets for dividend stability.
The cover story this week makes the argument that life won't be the same after the pandemic is over. "The pandemic is reshaping consumer, corporate, and government behavior. Long-held assumptions have been discarded. Deficit hawks have barely made a peep as policymakers spend trillions of dollars to stabilize the economy. Universal health care and social safety nets, once deemed too radical, are getting more mainstream attention," predicts the publications. Battle-tested investors are seen ending up being more cautious in what could be a reversal of the frothy last few years.
jog on
duc
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So regarding GDP issues driving a recession:
The shock to GDP will be front loaded, meaning, it is quite possible that we have already seen the market lows. There may be pullbacks (almost certainly) but that the 'low' is already in.
jog on
duc
The shock to GDP will be front loaded, meaning, it is quite possible that we have already seen the market lows. There may be pullbacks (almost certainly) but that the 'low' is already in.
jog on
duc
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Following up on the previous post: market downturns (bear markets) are correlated to the duration of the recession.
Which makes sense when you think about it. So, if from the previous post, the recession is shorter in duration due to the front loading, then, the market is moving from (L, W, and U) recoveries closer to a V recovery.
jog on
duc
Which makes sense when you think about it. So, if from the previous post, the recession is shorter in duration due to the front loading, then, the market is moving from (L, W, and U) recoveries closer to a V recovery.
jog on
duc
wayneL
VIVA LA LIBERTAD, CARAJO!
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If that was the bottom, I'm calling it the Fed Bottom.
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Wayne, long time...
Absolutely the Fed bottom. No Fed intervention, absolute carnage. The question is how much farther can the can be kicked? As the US$ is still the reserve currency, I think it can be kicked, but it is getting dodgy.
jog on
duc
wayneL
VIVA LA LIBERTAD, CARAJO!
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Agree.
I've been so wrong in the past about how far they can can be kicked, so a little bit gun shy now.
I have moderate confidence that there will be an extreme diversion between the fed economy and the real economy this time... With quite a few caveats included.
It's in those caveats that have me very caveated (sic).
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Woke up early and looked at the US..open on Easter Monday there
bought some FAS at what i consider a discount
The US is down a bit and not especially pleased it seems, but talks of reopening softened the fall, even positive now on Nasdaq
Wonder how the asx will react..
bought some FAS at what i consider a discount
The US is down a bit and not especially pleased it seems, but talks of reopening softened the fall, even positive now on Nasdaq
Wonder how the asx will react..
Last edited:
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Morning Mr Frog,
Some of the 'big' banks report this week. If there are no disasters, FAS should do very nicely. Given that these chaps are TBTF and would receive bailouts etc, it is a pretty safe bet down the road irrespective of what earnings are like this week.
jog on
duc
