This is a wounded, fragile stock market raging for a proper policy response

Brendan McDermid | ReutersBut can the recent near-30% crash in three weeks through Thursday have properly discounted an economic path now being set by an intentionally extreme reaction to a global health threat? What we can do is survey the wreckage, compare the action to prior severe stock-market collapses and stay alert to collateral issues that will almost certainly surface.

Bespoke Investment Group's chart of net advancing stocks over 20 days shows the utter washout conditions that helped set up Friday's wild 9% rebound. Ned Davis Research strategist Ed Clissold notes that Friday's upside reversal came with some 95% volume in advancing stocks. In order to have conviction that Thursday's low was consequential, he says several more such days would be needed, without an intervening 10:1 downside day.

But the equity-Treasury interplay was also thrown off by the retreat of large systematic funds that own stocks against leveraged Treasury portfolios, on the idea that losses in stocks will be made up by Treasuries rallying. Yet with Treasury yields so close to zero, there is so little room for Treasury prices to rise further to offset equity losses, that they simply reduced their holdings of everything.

What a bailout from the government?

More stock market turmoil due to coronavirus chaos🤔 Meaning it's a great time to invest in start-ups! 2008 financial crisis was a MAJOR peak in the start-up market over the past 25 years. 2008-10 Start-ups: Dropbox Airbnb Uber Square Learn more 👇

wait so the economy isn't strong

linksteroh Trump isn’t capable.

Ok smart guys. What would that proper response be?

Shut it down.

This market has been shot and its in the emergency room next to someone who has covid-19

Such as?

Maybe people need to understand that tax cuts and monetary stimulus is not the answer right now. Seeing the virus cases decline and people going back to their normal lives will be what causes the market to find a bottom. Certainly not politicians.

Ireland Ireland Latest News, Ireland Ireland Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

These stocks are 'at their best when the market is at its worst'New for subscribers: These stocks are 'at their best when the market is at its worst' Check out CNBCPro and get your first 30 days free. Pro I Don’t like Pepsi . Love 💓 Coke always Pro Exploit the fear and lure more subscribers. Classy.
Source: CNBC - 🏆 12. / 72 Read more »

Next recession risk surging due to coronavirus acceleration: Chun Wang - Business Insider'Recession risk has risen dramatically': A Wall Street expert warns the coronavirus-induced market meltdown is just getting started — and says policy responses are way behind the curve If we get out if here with just a recession, it will be a miracle. vs at the same time... Bears will be soon punished
Source: BusinessInsider - 🏆 729. / 51 Read more »

Stock market outlook: Save cash for stock shopping list - Business InsiderMaking a detailed 'shopping list of stocks' will help investors avoid panic selling during the coronavirus outbreak, strategist Rich Steinberg said. We used all of that cash for toilet paper. I guess we weren't brave enough ghosts this time. Maybe next crisis!
Source: BusinessInsider - 🏆 729. / 51 Read more »