THE WEEKLY TOP 10
Table of Contents:
1) We expect a much more gradual rebound after this recession than the consensus believes.
2) That said, the initial bounce in stocks will be strong…even if it becomes more gradual later.
3) Looking forward, we’ll have to compare 2021 earnings forecasts with 2019 earnings, not 2020.
4) Bear markets take overvalued stock markets down to undervalued levels. They don’t stop at fairly valued.
5) The technical support/resistance levels on the chip group (a key leadership group) are well defined.
6) Many leveraged investors have “de-levered”, but few highly leveraged companies have done the same.
6a) There’s a different between “forced selling” and “I give up” selling, but they’re both powerful forces.
7) Nice bounce in crude on relief in terms of supply, but the demand side still sssssssssssssssucks.
8) We’re watching some VERY important support/resistance levels on the DXY dollar index.
9) Let’s give the authorities some time to implement their relief programs.
10) Could the European banks cause another financial crisis?
11) Keeping an eye on the credit markets (and CDS prices for investment grade crop bonds).
12) Shanghai & KOSPI indexes could/should be leading indicators for global improvement.
13) I love NY!
14) Summary of our current stance.
1) The bull market of 2009-2020 was fueled much more by central bank stimulus…AND the leveraging up by investors and corporations that went with it…than it was fueled by fundamental growth. Although the Fed will do want ever it takes to give the markets a safety net, they might not (and maybe cannot) push asset prices higher…in the same strong and/or as sustainable fashion that they did when we came out of the last recession. Therefore, we expect a retest/undercut of the March lows…and a more gradual ...