"I’m not gonna lie to you: the market reaction to this reopening play is bemusing and confusing. Spooz are trading like it’s all back to normal in a matter of weeks, and while the opinions of armchair epidemiologists may not be worth much, actual ones are suggesting that the timetable is too aggressive and there remain significant holes in the plan vis-a-vis testing.Note: Spooz is slang for S&P 500 futures contracts... NDX is the symbol for the Nasdaq 100 Index
The NDX is already back up on the year; at this rate I guess we’ll be at all time highs in a matter of weeks. Just let that sink in again: after rallying nearly 40% last year, the NDX has decided that the biggest global growth contraction in decades should have no net impact on the price of its constituent stocks this year. “Remarkable” doesn’t come close to describing it.
If you buy equities at these levels on the hope or expectation that significant portions of the economy re-open shortly, I wish you good luck but I’m not tempted to join you. It’s true that the economy isn’t the market, but even with the geyser of free money handouts it feels like prices have taken a short cut to recovery. Whether that proves to be an accurate routing is a question that will only be answered in the fullness of time."
Friday, April 17, 2020
Quote of the Day
The following by macro analyst Cameron Crise should sound very familiar to those of you who've reached out to me in recent days soliciting my view on wading (unhedged) into this market: