Sunday, July 5, 2020

How Much Longer for the COVID Bull Market?

Currently the market is valued near previous highs without COVID?   The NASDAQ maybe should be valued at more than before given many technology companies are flourishing and many because of what COVID has forced the economy to do.   However, since then unemployment has RAGED, many companies are teetering (24 HR Fitness, Avis, Hertz,United, Banks, Airlines, Travel, Leasure etc.), and Trillions have gone into the market support systems from the FED and the like.    How much stimulus corrects the math of exponential growth of Covid is playing out.   Seems like time for the market to take a breather or corrections perhaps?   What will things look like in 6 months for the market?

The Bulls: Internet Commerce, Software, Information Technology
  • Vaccine: Funding for vaccines is pushing many pharmaceuticals towards solving COVID
    • I believe a successful vaccine will be winter spring 2021.
  • Stimulus: Congress $3T Subsidies
  • CARES act additional unemployment of 600 per week runs out July 31,2020
    • HEROES could extend it.
    • PPP 
    • EIDL
    • Rent and Mortgage Relief
    • Paid Sick Leave
    • Student Loan Relief until September 30, 2020
    • Penalty Free IRA and ROTH
    • Employee Retention Act 
    • Federal Reserve Main Street Lending
    • Employee Retention Tax Credits
    • Short Time Compensation Plans
    • Economic Stabilization Plans
    • State and Local Government Aid
    • Hospitals and Health Assistance
    • Food Banks and Other Food Security- 450M
  • FED: Don't fight the fed because they are focused like never before to keep the economy moving.
    • Fed buying junk bonds and propping up all corporate debtors
  • Speculation: Robinhood example speculation from sports betting and from boredom betters

The Bears: Travel and Leisure, Banks, Cyclicals
  • Old Flu: H1N1 could be an additional problem we cant coordinate in conjunction with COVID
  • Reopening Bungled: Economy reopening was too fast and no amount of fiscal stimulus can fight the math of exponential growth.
  • Stimulus: Some stimulus is running out
  • Exponential COVID numbers: COVID numbers are climbing and accelerating in West and South
  • World wide covid numbers are accelerating
  • Xi vs. Trump Trade heating up
  • US elections heating up and there will be an exceptionally divisive for democrats and republicans
  • Main street restaurants, travel, hospitality, and other businesses in trouble till a vaccine arrives
  • Pfizer has had good trials on 24 people already
  • Restaurants and bars at best can make 50% of pre-Covid income
  • Unemployment spiking
  • Loan delinquencies rising and will create stress for banks and card issuers.
    • Home Loans
    • Car Loans
    • Student Loans

About Me

I have a passion for investing and surfing.

Blog Archive