Good morning!

The FTSE is back around 6000 after a rough session yesterday (down 250 points, or 4%) and more weakness this morning. This comes after the Federal Reserve indicated that the US economy would shrink by 6.5% this year, before returning to growth in 2021.

According to the ONS today, the UK economy contracted by a massive 20% in April, so that the overall economic contraction from lockdown is now c. 25%. It is hard to find comparisons in history for such a sharp and deep fall.

The VIX, the Fear Index which I keep a close eye on, continued its rebound and climbed by 50% to 40 yesterday. Fear remains elevated (for good reasons, I guess).

But there are strange discrepancies. Some of what I'd consider the most speculative stocks remain ebullient - Tesla ($TSLA) at $970 (market cap $180 billion), for example, but there are plenty of others, where confidence is high.

You have a bankrupt company like Hertz ($HTZ) whose market cap reached $700 million a few days ago (now lower). Hertz has even applied to issue $1 billion in new equity, which it could use to settle some of its debts. Many of the recent buyers of Hertz stock may be about to learn their first painful lesson in the stock market.

So it's a weird market - you have a terrible recession (depression?) on both sides of the Atlantic, you have lots of extremely scared investors hedging their market risk and buying up portfolio insurance, but you also have nosebleed valuations for some of the most speculative tech stocks and even for bankrupt companies. I suppose nobody ever said that any of this would make sense.

Some companies I've noticed today:

Finished at 2pm.


  • Share price: 48.69p (+23%)
  • No. of shares: 796.5 million
  • Market cap: £375 million

Trading Statement

This manufacturer of semiconductor wafers fell all the way to 20p during the March crash. Wow! I've had an eye on it since 180p, a few years ago.

I'm obviously not the company's biggest fan - see February for my most recent comments, where I noted its arguably…

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