Morning all.
Yesterday was a constructive day for the portfolio and I managed to close several more positions, achieving the objective of bringing up the cash balance a little.
I’ve moved from the weekly down to the daily to take a look at the SP500, which has just had 3 green candle days as it tries to bounce from the gap low on Sunday night.
Some of the analysts and traders on the financial media are already talking about the bottom being in, but I’m not convinced by their arguments at this time. The strong rally this week was fuelled by FED QE announcement, Congress stimulus agreement and President Trump touting full churches on Easter Sunday.
I was looking at some US data yesterday and it’s amazing to think that most of the Country is not even in any kind of lockdown currently, so his talk of relaxing measures is hard to take seriously. I’m concerned his way of talking about this will give people who are not in the few most effected states a false sense that life can be normal soon and start to jump the gun.
So to me that is a big red flag to this recovery rally, but aside from that, today we are going to see weekly jobless claims data and these numbers could start to properly reflect that economic effect this situation is starting to have on the workers in the states. And whatever this number is, it is likely to be worse next week.
Forecasts range from 860k from UBS to 4 million from Citi, showing how little consensus there is regarding the ‘on the ground’ situation. I think Goldmans Sach’s forecast of 2.25 million is where I’d put my view. A very horrible number and once confirmed, all the economic models will start updating on how this effects the rest of 2020.
So despite all the stimulus, the infection/death numbers are going to get worse and this jobless data today, unless much less than feared, could restart market weakness into the weekend.
It’s another day of beautiful weather here in the UK and I’m going to go wash the car as my excuse to get outside for a while sometime this morning as our lock down continues.
Stay safe, thanks for your time.
$SPX500 $DJ30 $NSDQ100
