Is It Time To Buy The Dip??? - Part 32
Yesterday, jobless claims were up by another 2.98 million last week. But if there is any light at the end of the tunnel, claims rose by less than half a million. There are now 26 million people out of work. Here’s a stat for you, Fed Powell said Wednesday that 40% of U.S. households earning less than $40,000 a year lost their jobs in March. Fed Powell hinted that this downturn may last long enough to cause extensive damage to the economy and make a recovery weaker and slower as small businesses go bankrupt and with fewer companies being able to hire the unemployed.
The era of coronavirus has already been hard on the American psyche, but the CEO of the world’s largest asset manager cautions that everyone should brace for even rougher days ahead, as the U.S. attempts to emerge from the worst public-health crisis in more than a century.
BlackRock’s Chief Executive Larry Fink forecast a dour near-term outlook for the economy as states and businesses grapple with reopening from COVID-19 lockdowns that have likely driven the U.S., and the rest of the world, into a deep recession, according to a report from Bloomberg News.
The news organization reported that Fink, speaking privately with clients of a wealth advisory firm, outlined an unattractive future in which the economy continues to weaken, bankruptcies soar and American consumers — the lifeblood of economic vitality in America — remain psychologically scarred from the impact of the deadly pathogen that has infected more than 3.7 million people (1.2 million in the U.S. alone) and claimed more than 260,000 lives globally, according to data compiled by Johns Hopkins University.
Then there is Dr. Fauci, the director of the National Institute of Allergy and Infectious Diseases and a member of the White House task force. While states are reopening their economy, Dr. Fauci said a hearing before the Senate Committee on Health, Education, Labor and Pensions, that the Covid-19 could bring even more “suffering and death,” and that he was concerned that rushing to reopen “would almost turn the clock back rather than going forward.” While Trump was surprised by what Dr. Fauci said and told the press his statement was unacceptable, Trump cheered several governors for pushing forward to reopen their states.
And then you had Billionaire investor David Tepper telling CNBC on Wednesday that the stock market was one of the most overvalued market he had ever seen and only second to the tech bubble.
And then there is Stanley Druckenmiller. Many of you have heard of George Soros who bet against the Bank of England in 1992 on what became known as Black Wednesday, where he made over $1 billion on the trade. Well it was his partner Stanley Druckenmiller, who helped George pull off the trade. Stanley thinks stocks are at high multiples given the uncertainty of the current environment and looming bankruptcies. Stanley feels, the stock market's risk-reward is the worst he's ever seen and is concern that the stimulus packages won't be enough to solve the economic problems due to COVID-19.
The next leg down, if the Markets were to turn is price closing below the $270 level on the daily chart.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
