Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

ProfessorGAC

(64,413 posts)
Tue May 19, 2020, 04:14 PM May 2020

Continued Roller Coaster on Dow

Lost 70% of yesterday's gains, unless there's a big late rally.
Been doing this for 4 weeks.
The monthly gain is substantial but there's no reason to believe it's sustainable. It's still down 15.6% since first market day in 2020.

7 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Continued Roller Coaster on Dow (Original Post) ProfessorGAC May 2020 OP
Only down a little bit from 16%. I kind of thought it was a bigger loss. Considering ... SWBTATTReg May 2020 #1
78+% Of Manufacturing, &... ProfessorGAC May 2020 #2
I think you got some very good points!! SWBTATTReg May 2020 #3
How does one price in the fall and winter? Shermann May 2020 #4
Optimism, I Guess ProfessorGAC May 2020 #5
The Fed put support on the bottom but the recogning is on the way. judeling May 2020 #6
Our "C" % Is Already Higher Than China's. ProfessorGAC May 2020 #7

SWBTATTReg

(21,856 posts)
1. Only down a little bit from 16%. I kind of thought it was a bigger loss. Considering ...
Tue May 19, 2020, 04:26 PM
May 2020

the walloping everybody is talking about, moaning about (I can't get my hair cut, etc.), I kind of thought oh no, the markets have collapsed totally. But they really haven't collapsed (yeah, sure they're down, but not like down 50-60% which happened in the great depression).

I wonder if the markets are absorbing some of what would be considered losses in the old days before the 1%ers took so much control of our economy (and the stock they own), thus, they are artificially reining in the 'true' losses by not selling into the market downturns. I'd say beware. I have heard of this happening before, the pumping up of stock values prior to the great depression (which failed too).

I wouldn't put it pass them, to hold on to their stocks and such, being that businesses are cash rich, and thus, you'd be an idiot to sell the stock of a company that is sitting on billions and billions of dollars (like so many are now). They're probably just sitting on the sidelines waiting for truly good buys to spend that cash. If they start spending that cash, then jump back in because they think the bottom is getting close or they are simply timing the purchase of yet more stock at the wrong time. Either or.

Personally I think the markets are too easily manipulated. Thus, this is a big reason I stay mostly out of it. Cash cash cash! I always feel safer.

ProfessorGAC

(64,413 posts)
2. 78+% Of Manufacturing, &...
Tue May 19, 2020, 04:41 PM
May 2020

...95+% of financial services are in full operation. Even banks with closed lobbies, they are doing drive through & online services, including lending.
And, nearly 70% of retail is normal, given the big box stores being one stop shopping, including food.
Based upon current economic performance, it should be lower, but investors are betting on return to normal in a year.
If we don't get to "mostly open safely" soon, the UE number will impact consumption, & therefore earning.
The market could take another dive.

Shermann

(7,355 posts)
4. How does one price in the fall and winter?
Tue May 19, 2020, 05:17 PM
May 2020

There won't be a vaccine and surely a resurgence of the virus.

ProfessorGAC

(64,413 posts)
5. Optimism, I Guess
Tue May 19, 2020, 05:23 PM
May 2020

My numbers say DJIA, S&P, & Russell are about where they should have been all along. They were highly overvalued in January & early February.
If things reopen, & people stick with mitigation efforts, AND a great number of the newly unemployed go back to work the market should tread water.
Sloppiness, a new surge, and continued UE at near record numbers and the investors who bid thing up the last 2 weeks will regret it.
But, a LARGE fraction of investors are looking a 6 months to 3 years down the road.
The day trading and short turnaround investors are a small % of the whole.
If one is thinking 2 years, there's time for a recovery after we're out of the worst of this.
But, fall & winter are not, as you suggest, guaranteed to be good.
It's a casino risk.

judeling

(1,086 posts)
6. The Fed put support on the bottom but the recogning is on the way.
Tue May 19, 2020, 06:02 PM
May 2020

The Federal Reserve has basically set the bottom range of the Markets by stating they will inject all the money needed to carry on until the economy bounces back. Congress injecting so much cash into the system allowed the real bottom not to drop off.

The underlying economy will reassert itself in market thinking. Starting in July as those who only think they are temporarily unemployed realize it is permanent. Around the same time those second tier and smaller companies will find that even with easy credit that there are limits and bankruptcies will start. Both equity and credit are drifting more and more to big. We probably avoided a depression but we are in for a deep and long lasting recession.

China the economy most advanced in recovery has only managed to get industrial production up to 90% of pre-crisis and now looks to be falling back. On their consumer side the got back to about 70% and fell back even faster. That is down somewhere around 10-12% of trend. If that is even close here it will be worse then 2008.

ProfessorGAC

(64,413 posts)
7. Our "C" % Is Already Higher Than China's.
Tue May 19, 2020, 06:09 PM
May 2020

The 2nd quarter contraction does not represent 70% of typical consumption. More like 83%.
We have a shorter path to return, but not if unemployment doesn't go down a huge % toward where it was.
I'm not optimistic, but the actual underpinnings are only bad, not tragic or dire.

Latest Discussions»General Discussion»Continued Roller Coaster ...