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Good morning, Bull Sheeters. The stocks are – shocking! – Lower this morning, even if more stimulus expenditure is in the works. There is also data showing that the US economy is not in such a terrible state. The weak start to the trading day is just a slip of an otherwise two-month record run for stocks.
Let's review the action.
- The Asian indices are mixedWith Shanghai lower in the afternoon trade.
- HSBC is the youngest financial company to publicly support Beijing's new national security law. Draw criticism from Hong Kong's top for democracy Activist.
- Airlines seem to be at the center of the recent spit between Beijing and Washington. China said on Thursday US airlines are You are free to resume restricted incoming service the day after the Trump administration said no to Chinese airlines. Your move, Washington.
- European The stock markets fell outdoors this morning with the benchmark STOXX Europe 600 Low 0.2% one hour after the start of trading at the lows.
- All eyes are on them ECB. The central bank is meeting again today to see if its EUR 750 billion PEPP Asset purchase plan is enough to revive the stalled economy of the eurozone. If it doesn't add to a good half a trillion You could see stocks suffering a blow, market watchers say.
- You wanted 100 billion euros Recovery plan, Ms. Merkel? Here is EUR 130 billion, The German legislature decided. It is a creative package that a Reduce VATand build billions 5G data networks, Improve and double railways Incentives for electric vehicles. (Germany has a pretty good pandemic if you haven't noticed.)
- US futures are down, but from their lows.
- A pause in the US stock rally must happen. In the end. Until then, consider the following: the S&P 500 is more than 37% in the past 50 trading days, his best run ever. To repeat: Best. Run. Each.
- This is going to be a great week for US job data. The latest readings come out today Unemployment benefits. Forecasters agree: the job market has almost lost 2 million jobs Last week.
- gold is below.
- The dollar is on, but these are small potatoes. The Euro is on the biggest winning streak against the greenback in seven years. Grumble, grumble.
- Raw falls. After the climb $ 40 / barrel, Brent is below 1.2% in morning trade.
Fear of FOMO
From Japanese blue chips to American small caps, stocks have had a bull run for ages. Growth stocks and cyclical burn, despite economic data that show record job losses and a slump in growth.
As we have discussed many times in this room, this is Stock market sees one V-shaped Recovery while the global economy sees anything but.
This separation can also be seen in the investor's mindset. Allianz released its latest quarterly investor survey at the end of last week, which shows that there are still major concerns about the COVID-19 impact on portfolios and on the overall economy. Check out this morning's table.
Almost two thirds of respondents believe that we are entering not only a recession, but a major recession. And another one 58% COVID has a negative impact on old-age provision. Oh and 54% I don't think the market has bottomed out yet.
Now here comes the separation. The same investors suffer from it FOMO case. A fairly significant number don't want to miss this incredible bull run, as the next graphic (from the same Allianz survey) shows.
Allianz asks the survey panel quarterly whether this is the case now a good time to invest. As the chart above shows, there was a big leap in the yes respondents in the last quarter. It is still in the minority, but the more bullish trend is worth mentioning.
How is it that both fears of a mega recession and fear of a missed mood hang over investors? I imagine the proverbial angel on one shoulder and the devil on the other, who breaks down all the traditional economic indicators for a healthy economy – employment, GDP – and the markets rise.
So I open it up to the Bull Sheet community: do you see conflicting signs of the future of your portfolio and the future of the economy? More to the point, does it matter at all?
Shoot me a line if you have a moment. I'm looking forward to your opinion.
I wish everyone a pleasant day. We'll see you here again tomorrow.
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