Morning all.
Markets are on the up this morning with some optimism from improving case statistics from Europe and the US reporting drop in new daily cases.
President Trump also jumped back on the bandwagon of suggesting they’ve got to get the country open soon and that things are improving quickly. This rhetoric coming just hours after the US Surgeon General telling the country the next week will be the US’s Pearl Harbour and 9/11 Moment and the hardest moment for many American in their entire lives.
There are other conflicts to this positive mood too which makes me cautious. Japan are reportedly close to announcing a state of emergency, Spain have extended the lock down period, India cases are starting to pickup, Singapore just increased their lock down measures at the weekend, several US states still don’t have stay-at-home measures in place while more parts of the world have been implementing stricter measures.
It’s great news from a health/life perspective if the virus spread is really being fought back, but the fact is, the measures being taken to ensure this are getting extended in both duration and magnitude which means the economic effects are doing to be deeper and more painful.
This clouds the picture of how enthusiastic markets should really be about the current picture as data coming out through April is likely to worsen further and push-back the recovery timelines as more harm is done to business solvency levels and household finances.
Great for the portfolio if stocks do rally further but for now I’m going to proceed on the basis that stocks have a high probability to move lower for a while yet and avoid the temptation to turn fully bullish on this rebound.
What do you think, is the SP500 back on a path to 3,000 from here or does it need to go test the March lows to reflect the worsening economic data?
Stay safe, thanks for your time.
$SPX500 $NSDQ100 $DJ30
