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Savings and Investments thread
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One action they could take is to take no action. The markets have smelt fear & are baying for blood. They know Governments dont know what to do & now nowhere else to go in terms of fiscal policy.hoof_it_up_to_benty said:It's now starting to resemble the Great Depression - startling market falls across the world on a scale that's quite mindblowing. I think the majority of Governments are pretty clueless what action to take.
Not a good time.0 -
No end in sight to losses at present.golfaddick said:
One action they could take is to take no action. The markets have smelt fear & are baying for blood. They know Governments dont know what to do & now nowhere else to go in terms of fiscal policy.hoof_it_up_to_benty said:It's now starting to resemble the Great Depression - startling market falls across the world on a scale that's quite mindblowing. I think the majority of Governments are pretty clueless what action to take.
Not a good time.0 -
There must be an end sometime, because if the FTSE fell to 0 that would mean ALL the 100 constituents are worthless.........hoof_it_up_to_benty said:
No end in sight to losses at present.golfaddick said:
One action they could take is to take no action. The markets have smelt fear & are baying for blood. They know Governments dont know what to do & now nowhere else to go in terms of fiscal policy.hoof_it_up_to_benty said:It's now starting to resemble the Great Depression - startling market falls across the world on a scale that's quite mindblowing. I think the majority of Governments are pretty clueless what action to take.
Not a good time.
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golfaddick said:
There must be an end sometime, because if the FTSE fell to 0 that would mean ALL the 100 constituents are worthless.........hoof_it_up_to_benty said:
No end in sight to losses at present.golfaddick said:
One action they could take is to take no action. The markets have smelt fear & are baying for blood. They know Governments dont know what to do & now nowhere else to go in terms of fiscal policy.hoof_it_up_to_benty said:It's now starting to resemble the Great Depression - startling market falls across the world on a scale that's quite mindblowing. I think the majority of Governments are pretty clueless what action to take.
Not a good time.
And finally, financial news. The FTSE 100 closed today at 16.32, down 0.1, with a surprise new entry 'The Valley Cafe'.
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Some commentary on the markets.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
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Let me stress my cynicism is not aimed at you - indeed thanks for posting - but I've pissed myself laughing at the bit that says stock markets should fully recover in the 2nd half of the year! The finance industry just can't help itself, can it?wwaddick said:
Some commentary on the markets.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!2 -
This is what I received from Investec on 13th March:
Following on from my recent Coronavirus letter and after the dramatic events of the past few days, I felt it sensible and prudent to write again with our latest thoughts. I certainly do not want to bombard you with letters, but given the vast amount of media attention this is generating, it feels appropriate for us to stay in close contact.
As you will be aware, in the last 10 days, we have seen a significant increase in market volatility, as the epidemic continues to unsettle investors. On Monday, a new factor was introduced with an extraordinary fall in the oil price (down 30% at the start of trading) after Saudi Arabia walked away from the OPEC meeting, unleashing an all-out price war with Russia, which threw already unsettled markets into turmoil. This has caused the FTSE 100, our premier index, to fall nearly 30%, year to date.
Unfortunately the sharp decline suffered by global markets has triggered a fall in the value of your portfolio since the last formal valuation. As such, I wanted to write to you to reassure and to let you know that I am here, monitoring things closely and will react immediately, if we feel we should alter your investments.
Please do be assured that through sensible asset class diversification and appropriate stock selection, we are certainly not experiencing the full level of falls seen by global equity markets.
Whilst undoubtedly the economic impact of the virus will be material in the short term, we do feel many shares have already moved into oversold territory and do expect markets to recover well, once the outbreak is under control. There may well be further volatility over the coming few weeks and even months yet, but without dismissing the serious nature of this, we are certainly not panicking this end.
Some of the factors supporting this view are expanded on within the Weekly Digest, which I have enclosed with this letter. Clearly, this situation is moving rapidly, so please forgive me if anything we write already appears out of date. We can set clients up to receive this Digest via email every week, so if this would be useful and of interest, please let me know.
One thing is very clear, central banks and government will be doing everything they can to calm nerves and stabilise the global economy. We can see this by the 0.5% cut in interest rates by the Federal Reserve and Bank of England over the past few days. This is part of massive and coordinated global fiscal packages, to ensure that we protect global growth.
This will not, of course, prevent immediate stock market volatility or reduce the short term spread of the virus. However, when normality returns (and we are confident it will), it should rapidly accelerate the recovery.
We saw this intervention work well after the financial crises of 2008. We should not forget that then we were facing the collapse of the global banking system and yet we pulled comfortably through that. We see no reason to believe this will be any different.
So to conclude, we have always stuck to quality investments that will deliver on your objectives for you. Whilst we are all currently feeling battered and bruised, we will eventually move through this and, we are of course also looking at the portfolios to ensure that we fully participate in the upturn in the market.
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Are the stock markets really something for you? You seem to have a very little level of trust for anyone involved.Fortune 82nd Minute said:
Let me stress my cynicism is not aimed at you - indeed thanks for posting - but I've pissed myself laughing at the bit that says stock markets should fully recover in the 2nd half of the year! The finance industry just can't help itself, can it?wwaddick said:
Some commentary on the markets.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
Might better to invest elsewhere0 -
Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?0 -
Covering their arses.0
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With the pound crashing in value do you have any tips for those of us abroad to take advantage of the situation?PragueAddick said:Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?0 -
Shit. I knew I shouldn't have talked to Goldmans. They only wanted 5 mins of my time they said......didn't realise they were going to print it. 😀4
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Only very boring advice I am afraid, which is, longer term, try to be hedged by holding savings in your home currency, as well as in the UK. Us mug punters really have no way to "play" the forex markets. Actually against the Czech crown the pound has not really plunged at all, but in turn that is largely a consequence of the crown significantly weakening against the euro. Forex markets are impossible for most of us to predict. e.g. if I were optimistic on your behalf, I might think that the big slow down in China will lead to a weakening of the RMB, but I could be completely wrong.Stu_of_Kunming said:
With the pound crashing in value do you have any tips for those of us abroad to take advantage of the situation?PragueAddick said:Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?0 -
No worries, thought I would pass it on.PragueAddick said:Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?
I worked in the interest rate/fx markets for a long time. If you want to hear bullsh*t, that and other markets are the place to go.
Can't help but think the community is talking its book to a certain extent.
Did seems strange that contradictory statement.0 -
Turned 55 just before Christmas, beginning to regret not taking my 25% of my pot.
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We've gone from 9.01 RMB to the pound to 8.5 in a matter of days, I wasn't really thinking of 'trading' to turn a profit, but perhaps sending a chunk home, to keep there if it drops to 8.PragueAddick said:
Only very boring advice I am afraid, which is, longer term, try to be hedged by holding savings in your home currency, as well as in the UK. Us mug punters really have no way to "play" the forex markets. Actually against the Czech crown the pound has not really plunged at all, but in turn that is largely a consequence of the crown significantly weakening against the euro. Forex markets are impossible for most of us to predict. e.g. if I were optimistic on your behalf, I might think that the big slow down in China will lead to a weakening of the RMB, but I could be completely wrong.Stu_of_Kunming said:
With the pound crashing in value do you have any tips for those of us abroad to take advantage of the situation?PragueAddick said:Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?
It's also worth remembering the RMB doesn't really weaken like most currencies, it's very much controlled.0 -
The death toll associated with influenza in England in 2017/2018 was 26,408.Fortune 82nd Minute said:
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!wwaddick said:
Some commentary on the markets.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
Covid 19 related deaths in the whole of the UK is presently 55. (just saying I know all the info).0 -
Exactly. I looked it up this morning. Average deaths over the last 5 years from flu is 17000. And lots of people over 60 get the flu jab so are immune.Covered End said:
The death toll associated with influenza in England in 2017/2018 was 26,408.Fortune 82nd Minute said:
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!wwaddick said:
Some commentary on the markets.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
Covid 19 related deaths in the whole of the UK is presently 55. (just saying I know all the info).
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I reckon those numbers will go through the roof over the next few weeks.Covered End said:
The death toll associated with influenza in England in 2017/2018 was 26,408.Fortune 82nd Minute said:
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!wwaddick said:
Some commentary on the markets.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
Covid 19 related deaths in the whole of the UK is presently 55. (just saying I know all the info).
Hopefully I'm wrong0 -
I really want GS to be right. It feels like a longer 911 that will hopefully recover when infection rates slow. Not that kick starting the economy will be easy.
But now I'm very worried as GS have a lot of form. Remember when oil was going to go to 250 dollars a barrel ... just before it crashed?
I don't generally believe in conspiracies but they have a habit of being on the other side of their predictions, as Prague says. 2008 was just one example.
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Listen, I was probably playing around on the stock market before you were born - can remember buying some STC shares in the late 70s/early 80s and making a pretty little penny when I immediately sold them. Had my fair share of successes (and odd failures!) since so I'm quite happy investing in the stock market. But thanks for your advice!Stu_of_Kunming said:
Are the stock markets really something for you? You seem to have a very little level of trust for anyone involved.Fortune 82nd Minute said:
Let me stress my cynicism is not aimed at you - indeed thanks for posting - but I've pissed myself laughing at the bit that says stock markets should fully recover in the 2nd half of the year! The finance industry just can't help itself, can it?wwaddick said:
Some commentary on the markets.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
Might better to invest elsewhere
I have 2 big gripes with the stock market. Years of careful growth so often get wiped out in days when something spooks the market and the traders don't feel confident. Yes, so far, the market has always gone back up but sometimes it takes years - 15 from close on 31/12/99 to the level it was that day. With most people's pensions now invested in the stock market, not everyone now has the time to sit and wait for it to recover such huge losses. Anyone whose pension is now coming up for payment faces a huge loss, and a much poorer retirement, than otherwise they would have faced 15 days ago.
Secondly, notes like that from GS saying "Stock markets should fully recover in the 2nd half of the year" strike me as highly irresponsible. (Laws of libel stop me saying what I really think). They don't know anymore than I do in these unchartered times what will happen. It's just like saying let's keep people investing so we keep getting our commission. When do traders ever say the market is going down? Look at the end year predictions they come up with. Nearly always upwards.
Anyway, there we go. We've had a good dead cat bounce rally today. All is good with the world. Buy, buy, buy. And doubles all round.
(PS As regards "levels of trust", I was invested in the Woodford funds. Fortunately got out well before they were suspended but what a disgrace that turned out to be in the end. Anyone held responsible yet? Not to my knowledge. So excuse me if I am cynical about the workings of the market).3 -
I’ve seen a GS note go out and my mate, a broker, told me he was working orders the opposite of what they were saying , scumbags1
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The financial sector is too big to fail and knows it will always get bailed out. Happy to risk our money for their own ends.Fortune 82nd Minute said:
Listen, I was probably playing around on the stock market before you were born - can remember buying some STC shares in the late 70s/early 80s and making a pretty little penny when I immediately sold them. Had my fair share of successes (and odd failures!) since so I'm quite happy investing in the stock market. But thanks for your advice!Stu_of_Kunming said:
Are the stock markets really something for you? You seem to have a very little level of trust for anyone involved.Fortune 82nd Minute said:
Let me stress my cynicism is not aimed at you - indeed thanks for posting - but I've pissed myself laughing at the bit that says stock markets should fully recover in the 2nd half of the year! The finance industry just can't help itself, can it?wwaddick said:
Some commentary on the markets.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
Might better to invest elsewhere
I have 2 big gripes with the stock market. Years of careful growth so often get wiped out in days when something spooks the market and the traders don't feel confident. Yes, so far, the market has always gone back up but sometimes it takes years - 15 from close on 31/12/99 to the level it was that day. With most people's pensions now invested in the stock market, not everyone now has the time to sit and wait for it to recover such huge losses. Anyone whose pension is now coming up for payment faces a huge loss, and a much poorer retirement, than otherwise they would have faced 15 days ago.
Secondly, notes like that from GS saying "Stock markets should fully recover in the 2nd half of the year" strike me as highly irresponsible. (Laws of libel stop me saying what I really think). They don't know anymore than I do in these unchartered times what will happen. It's just like saying let's keep people investing so we keep getting our commission. When do traders ever say the market is going down? Look at the end year predictions they come up with. Nearly always upwards.
Anyway, there we go. We've had a good dead cat bounce rally today. All is good with the world. Buy, buy, buy. And doubles all round.
(PS As regards "levels of trust", I was invested in the Woodford funds. Fortunately got out well before they were suspended but what a disgrace that turned out to be in the end. Anyone held responsible yet? Not to my knowledge. So excuse me if I am cynical about the workings of the market).0 -
So, I have only seen the headlines but this Sunak geezer seems to be getting grudging plaudits from unlikely sources. Do we, finally, have an adult in the room?0
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The devil of course of what he announced will be in the detail. This will become clearer over the next few days as will the timescale and methods of delivery. Looks like a real administrative challenge to get the support to those who need it quickly.PragueAddick said:So, I have only seen the headlines but this Sunak geezer seems to be getting grudging plaudits from unlikely sources. Do we, finally, have an adult in the room?1 -
And of those Covid deaths most had underlying health issues and some would probably have died from the effects of normal flu.Covered End said:
The death toll associated with influenza in England in 2017/2018 was 26,408.Fortune 82nd Minute said:
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!wwaddick said:
Some commentary on the markets.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
Covid 19 related deaths in the whole of the UK is presently 55. (just saying I know all the info).1 -
Been very impressed with what I have heard, speaks well, makes sense, like a breath of fresh air. Future PM in my opinion.PragueAddick said:So, I have only seen the headlines but this Sunak geezer seems to be getting grudging plaudits from unlikely sources. Do we, finally, have an adult in the room?0 -
Gutting to see the few quid i’ve put away for the boy is down by almost 10% now. Got another 15 years to go but hate that red.
Tempted to take it out in cash but part of me wants to stick with it because of the time until access.
I’m in with:
L&G All Stocks Index - Linked Gilt
Baillie Gifford Managed
Barings Europe Select
Was doing alright before this craziness!
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Just keep trickling it in, today you are buying units and getting 35% more or there abouts for your cash.WSS said:Gutting to see the few quid i’ve put away for the boy is down by almost 10% now. Got another 15 years to go but hate that red.
Tempted to take it out in cash but part of me wants to stick with it because of the time until access.
I’m in with:
L&G All Stocks Index - Linked Gilt
Baillie Gifford Managed
Barings Europe Select
Was doing alright before this craziness!2 -
My pension plan has been decimated - a disaster for many.0
