Hello Everyone,
Trust everyone is safe and well. I wanted to know everyone's thoughts on market forecast. Would the market retest 23rd March Lows or it done and dusted with?
Any other input appreciated too.
Thanks
Harv
It is my opinion that the markets, in particular the S&P500, are going to take a vertical dive. Why, you may ask.
1) US employment, 30 million have lost their job in the last six weeks (155 Million Employed in March 2020) https://tradingeconomics.com/united-states/indicators Massive loss of employed workers!
2) Large numbers of staff are currently furloughed across the world, mainly of whom are likely to join the dole queue, as companies realize that "demand" is unlikely to return in similar volumes as before.
3) Many households after the lock-downs will not have the finances to create any "demand" for services or products; many are already deferring mortgage payments (UK 1 in 9).
4) When a country does come out of lock-down, the "demand" from other counties will be dramatically reduced, creating a vortex of "declining supply & demand"
5) Lack of Leadership and Federal response in the USA by imposing a half hearted lock-down that is likely to extend the period of infection to at-least by 2 years.
6) Those in lock-down (full or semi), in particular the retired, are unable spend their well earned pension income (like me).
7) The world is very pre-mature in thinking that the problem (Covid-19) is likely to disappear shortly, Spanish Flu lasted 3 years (1918-20). We are at the very early stages, of both the Pandemic & forthcoming recession.
8) When will the tourism, travel & entertainment industries recover? Not until Covid-19 has been soundly defeated. For some countries it is their life-line.
9) Who is going the buy the Government "War (Covid) Treasury Gilts" at 0.30% (10 year yields)? , in order to pay for pay for the shut-down. Perhaps only the Bank of England?
Expect a major recession!