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May 26, 2020
We had an initial panic and not a bifurcated market: companies immune to the downturn (i.e. grocers) and retailers who are struggling. The financial sector intrigues him--there's a 5-6% bump today. Yes, stimulus is driving this rally, but we still need consumers to drive it until there is rigorous economic activity. Very low interest rates will remain a drag on banks, but they will adapt, such as using more technology.
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We had an initial panic and not a bifurcated market: companies immune to the downturn (i.e. grocers) and retailers who are struggling. The financial sector intrigues him--there's a 5-6% bump today. Yes, stimulus is driving this rally, but we still need consumers to drive it until there is rigorous economic activity. Very low interest rates will remain a drag on banks, but they will adapt, such as using more technology.
COMMENT
COMMENT
May 26, 2020
Is there really a V-recovery? For most U.S. stocks, like the banks, they haven't seen a V recovery. Remember that stock markets look to the future, so some investors are optimistic, while others are more cautious and expect a slower recovery. The market does not reflect the economy, necessarily. Tech stocks, like Amazon and Google, are driving the markets, while other stocks remain 20% down. This is a bifurcated market. Nobody really knows what the recovery will be. Also, remember that fiscal stimulus lasted 3-4 years after the recession, and there was slow economy growth. Don't be surprised if this happens again. Does your optimism about the recovery match the market's?
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Is there really a V-recovery? For most U.S. stocks, like the banks, they haven't seen a V recovery. Remember that stock markets look to the future, so some investors are optimistic, while others are more cautious and expect a slower recovery. The market does not reflect the economy, necessarily. Tech stocks, like Amazon and Google, are driving the markets, while other stocks remain 20% down. This is a bifurcated market. Nobody really knows what the recovery will be. Also, remember that fiscal stimulus lasted 3-4 years after the recession, and there was slow economy growth. Don't be surprised if this happens again. Does your optimism about the recovery match the market's?