Coronavirus and the market

[Kompass]

I don't think a vaccine matters all that much one way the other. With so many efforts underway, surely some sort of vaccine is coming. It may be a bit sooner or later, and who knows how effective it will be, how many people will get it, etc.

I think what will matter more is how many businesses will go under in the coming months, where will the unemployment rate settle, how much will consumers retrench, etc.

At some point there will also have to be some sort of coming to terms about all of the back rent that has not been paid. That looks like another spot between a rock and a hard place.

[F150HD]

I wonder how the markets will react to the latest news from across the pond. I suspect this won't be viewed as a positive development.

LONDON — Prime Minister Boris Johnson announced plans on Saturday to shut down pubs, restaurants and most retail shops throughout England.....

I wondered the same when I saw this yesterday. Then I wondered how/if the election would have a similar or opposite effect. Guess we'll know this week.

If one lives in a colder climate, look for even more restaurants to fold up forever. The effect on the markets? Dunno....

absolutely. where I am at, its too cold to sit on a patio to dine, though places w/ patios were able to survive summer as they had outdoor space. This could be nail in coffin for many restaurants/bars etc.

[KyleAAA]

I wonder how the markets will react to the latest news from across the pond. I suspect this won't be viewed as a positive development.

LONDON — Prime Minister Boris Johnson announced plans on Saturday to shut down pubs, restaurants and most retail shops throughout England.....

I wondered the same when I saw this yesterday. Then I wondered how/if the election would have a similar or opposite effect. Guess we'll know this week.

If one lives in a colder climate, look for even more restaurants to fold up forever. The effect on the markets? Dunno....

absolutely. where I am at, its too cold to sit on a patio to dine, though places w/ patios were able to survive summer as they had outdoor space. This could be nail in coffin for many restaurants/bars etc.

As long as it doesn’t turn into a financial crisis (seems unlikely), I don’t see this impacting the overall health of the economy in the long term. Many bars and restaurants will close, but new bars and restaurants will replace them once the pandemic ends. There is huge pent-up demand.

[Keenobserver]

Here In NYC, the Boroughs are business as usual minus Manhattan of course. I could not find room to even double park yesterday. People are out and about and desperate to socialize. Man is social animal and you cant take that out of him.

[LadyGeek]

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See: Please read before posting on coronavirus/COVID-19

[LadyGeek]

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[F150HD]

COVID crash: Companies that have filed for bankruptcy

In that slideshow.....

Neiman Marcus executives seek $10 million in bonuses during bankruptcy

"...the Neiman Marcus compensation plan covers 17 senior vice presidents, 82 vice presidents, 40 directors and up to 100 additional key employees"

maybe they need more vice presidents

[Stinky]

It's fascinating that the virus daily case count has grown by leaps and bounds in the last week, exceeding 100,000 per day several times.

But the equity markets just keep on plowing ahead. S&P and Nasdaq are both 2-3% off all time highs.

[vwgrrc]

It's fascinating that the virus daily case count has grown by leaps and bounds in the last week, exceeding 100,000 per day several times.

But the equity markets just keep on plowing ahead. S&P and Nasdaq are both 2-3% off all time highs.

Triples tops forming on all three index

[Ed 2]

It's fascinating that the virus daily case count has grown by leaps and bounds in the last week, exceeding 100,000 per day several times.

But the equity markets just keep on plowing ahead. S&P and Nasdaq are both 2-3% off all time highs.

I don’t understand your frustration:). Market basically still flat for the year! Did earth stopped spinning? All companies closed for business? Or you just assumed that if restaurants and barbershops had lost lot’s of business and they represent the majority of S&P500?

[F150HD]

Market basically still flat for the year!

if one DCAs every 2 weeks via paycheck, then they were buying all along, oftentimes well below the 'flat for the year' you quote.

[guyinlaw]

Just to put it out there - I am very happy with risk on and stock rising. I have high exposure to stocks.

I am surprised market is over the moon about vaccine. Both SP500 and Russell 2000 today hit 52 day high.

1. Much of Europe has been put in some sort of lockdown. There will expectation there will be No lockdown in US nationwide. What about local shutdowns and increase in unemployment rate again? How will non-tech companies do with this?
https://en.wikipedia.org/wiki/COVID-19_ ... _lockdowns

2. Vaccine roll out will be very challenging. Most vaccines need two doses 3 weeks apart. I have serious doubts that this can roll out fast enough with govt transition etc.. Are Markets really taking this into account?
https://www.cbsnews.com/news/covid-19-v ... 020-11-08/

3. Stimulus checks helped push the stock market higher. With the next stimulus likely come only in Feb and with Senate hanging in balance it wont be easy..

Code: Select all

Current price above the Feb high
NASDAQ      +27%
SP500        +7%
Russell 2000 +3%
SCV          -8%

It is very hopeful day. But the vaccine is not going to be available to most people in Jan or Feb or March. @ScottGottliebMD is talking about third quarter. Masks, social distancing will be in effect at least until then. So limited travel, continued WFH, etc.

https://twitter.com/andrewrsorkin/statu ... 0339712001

[Ed 2]

Market basically still flat for the year!

if one DCAs every 2 weeks via paycheck, then they were buying all along, oftentimes well below the 'flat for the year' you quote.

And what is the point,besides I was trying to make the same one if you read my post completely?

[F150HD]

This seems to be a theme article across the web.

Based upon this, anyone see the market diving again like it did in March? if so, when? weeks following Xmas or NYE?

U.S. prepares for worst four months of the pandemic as it stares down the ‘darkest’ days yet

question is about the effect on the market.

[nigel_ht]

This seems to be a theme article across the web.

Based upon this, anyone see the market diving again like it did in March? if so, when? weeks following Xmas or NYE?

U.S. prepares for worst four months of the pandemic as it stares down the ‘darkest’ days yet

question is about the effect on the market.

Not if we have multiple vaccines close at hand with one around 90% efficacy. Even if we shut down we’re within 6 months of recovery.

Now if we have a more dangerous mutation then perhaps.

[guyinlaw]

Bill Ackman is buying insurance for a big drop.
https://www.foxbusiness.com/markets/bil ... d-19-surge

There is forecast of increased hospitalization, deaths of 2k/day, 400k by Feb. With this plus transition challenges and delayed stimulus - will the stock market notice?

Anyone else plan to buy insurance or reduce equity allocation? If so, how are you doing it?

Staying in the sidelines has been perilous in the last 6 months.

[KyleAAA]

Estimates from the CDC are around 30-40 million doses of the Pfizer and Moderna vaccines will be available by the end of the year (assuming both are approved, which seems somewhat likely). I guess that could be useful to innoculate healthcare workers and maybe a small portion of vulnerable population by the end of January. I don't see how we get 60%+ of the population vaccinated before next August, though. Maybe I'm overly pessimistic? I think it won't be until Q4 next year that we can realistically expect to be back to normal. But maybe we're near-normal enough for the economy to largely snap back to 2018 output by early summer? If I had to guess I would say the market will trade within a range until then. Hard to justify a rally from here without a high-confidence timeline for when the majority of the population will be able to get vaccinated.

That said, I'm not making any changes.

[clip651]

Bill Ackman is buying insurance for a big drop.
https://www.foxbusiness.com/markets/bil ... d-19-surge

There is forecast of increased hospitalization, deaths of 2k/day, 400k by Feb. With this plus transition challenges and delayed stimulus - will the stock market notice?

Anyone else plan to buy insurance or reduce equity allocation? If so, how are you doing it?

Staying in the sidelines has been perilous in the last 6 months.

My "insurance" is a liquid emergency fund, with the size appropriate for my life situation and expenses. Plus a stock/bond allocation that I feel I can hold through a crash, even if the recovery is not quick, or there are multiple crashes, or a slow crash, recovery, crash again, or whatever. That has been in place for me for years now. The asset allocation and size of emergency fund re-evaluated periodically as I get older and my personal circumstances change. But they aren't re-evaluated based on current world events.

So there is no need for me to even read the predictions (about the pandemic, or whatever else) from a personal finance perspective. I do watch the pandemic news to make personal health decisions!

For 2020, the pandemic was an unexpected event (pandemics in general are to be expected, but I wasn't expecting one in 2020 in particular). And the market overall has done much, much better than I would have predicted. And the drop in the spring was much shallower and quicker than I would have predicted. And the economy has really struggled (unemployment, small businesses closing or struggling, hotel and airlines and travel having a terrible time, etc) all year. But it doesn't matter that I'm terrible at predicting these things, because my normal plan accounts for the economy and/or the market possibly doing terribly for a while. (The economy and market are not the same, by a long shot.)

The general boglehead suggestion is to look at your overall financial picture, including expenses, job security, how close you are to retirement, etc. Set aside a suitable emergency fund. And pick a stock/bond allocation that will let you sleep at night regardless of whether we have big drop tomorrow, next month, next year, or whenever. Sooner or later, we're likely to have a big crash. Recovery will hopefully come, but recovery might not come quickly. That's always true, pandemic or not. A boring plan, but that's sort of the point. And it works.

Is anyone altering their stock allocation based on various predictions? I'm sure they are. Doesn't make it a good idea.

best wishes,
cj

[Valuethinker]

Estimates from the CDC are around 30-40 million doses of the Pfizer and Moderna vaccines will be available by the end of the year (assuming both are approved, which seems somewhat likely). I guess that could be useful to innoculate healthcare workers and maybe a small portion of vulnerable population by the end of January. I don't see how we get 60%+ of the population vaccinated before next August, though. Maybe I'm overly pessimistic? I think it won't be until Q4 next year that we can realistically expect to be back to normal. But maybe we're near-normal enough for the economy to largely snap back to 2018 output by early summer? If I had to guess I would say the market will trade within a range until then. Hard to justify a rally from here without a high-confidence timeline for when the majority of the population will be able to get vaccinated.

That said, I'm not making any changes.

The market will be a better predictor of that timeline than any public pronouncements. Stock prices will come to reflect the views of those who really know before we know, if you will.

If we really are back to "normal" by Q4 2021 then the first 6 months of next year will see the mother of all rallies.

It will be about the efficacy of the vaccines when they are available, and the degree to which social restrictions can be relaxed. My own view is that it is going to be a long, cold, grim winter for this. Hospitals in both USA and UK at or above capacity, people dying on stretchers in the corridors. If you saw those NY Times photos from Bergamot in Lombardy (northern Italy), the epicentre of the European pandemic during April/ May. Triage before you even get to medical treatment. Stretchers in the corridors. Masked Italian Army soldiers carrying corpses out to freezer trucks because the mortuaries were full...

However the market will do its rally thing months before things start to get better.

[Valuethinker]

This seems to be a theme article across the web.

Based upon this, anyone see the market diving again like it did in March? if so, when? weeks following Xmas or NYE?

U.S. prepares for worst four months of the pandemic as it stares down the ‘darkest’ days yet

question is about the effect on the market.

If there is any reasonable sign of a working vaccine, the market will look through this.

If we run back to March 1932, there will be a burst of optimism early next year.

I note the London Stock Exchange started its rally on the first big day of the Battle of Britain (August 15th 1940). As if the market was a better predictor of British air defence against the hitherto all-conquering Luftwaffe than the pundits at the time

https://en.wikipedia.org/wiki/Dowding_system

[TheCowbell]

I think the question is, aren't we in that rally right now? It doesn't compute, for me personally, that we'll continue to see explosive market growth from this point.

That said, I'm wrong far more than I'm right when I try to time the market, so we'll likely see explosive growth.

[KyleAAA]

Estimates from the CDC are around 30-40 million doses of the Pfizer and Moderna vaccines will be available by the end of the year (assuming both are approved, which seems somewhat likely). I guess that could be useful to innoculate healthcare workers and maybe a small portion of vulnerable population by the end of January. I don't see how we get 60%+ of the population vaccinated before next August, though. Maybe I'm overly pessimistic? I think it won't be until Q4 next year that we can realistically expect to be back to normal. But maybe we're near-normal enough for the economy to largely snap back to 2018 output by early summer? If I had to guess I would say the market will trade within a range until then. Hard to justify a rally from here without a high-confidence timeline for when the majority of the population will be able to get vaccinated.

That said, I'm not making any changes.

The market will be a better predictor of that timeline than any public pronouncements. Stock prices will come to reflect the views of those who really know before we know, if you will.

If we really are back to "normal" by Q4 2021 then the first 6 months of next year will see the mother of all rallies.

It will be about the efficacy of the vaccines when they are available, and the degree to which social restrictions can be relaxed. My own view is that it is going to be a long, cold, grim winter for this. Hospitals in both USA and UK at or above capacity, people dying on stretchers in the corridors. If you saw those NY Times photos from Bergamot in Lombardy (northern Italy), the epicentre of the European pandemic during April/ May. Triage before you even get to medical treatment. Stretchers in the corridors. Masked Italian Army soldiers carrying corpses out to freezer trucks because the mortuaries were full...

However the market will do its rally thing months before things start to get better.

I think the market has already priced a high probability of a return to normal in Q4 2021, so I don't expect a spring rally. I expect prices to adjust up steadily as we gain more confidence in that outcome. And certainly if it becomes clear we'll be back to normal by, say, May we could see a jump.

[peppers]

Currently, our city and county has a 30 day stay at home advisory in effect. Seeing how my fellow citizens have behaved in the past.....I'll be home for Christmas, lockdown going on. (Sorry Bing)

On the plus side, there are days when the Amazon, Fed Ex, UPS and USPS trucks are double parked in the street making deliveries. Make of it what you will.

[LadyGeek]

I removed an interchange that was discussing the coronavirus vaccine (medical aspects). Please stay on-topic, which is about the market.

Also see: Please read before posting on coronavirus/COVID-19

[7eight9]

I'm not sure how important Black Friday is to the market with all the on-line shopping happening these days. One thing for sure - it will look very different this year.

Walmart will start counting customers again as coronavirus cases reach record levels
Walmart's Black Friday deals will last three weekends, which will begin on its website before hitting stores a few days later. "Black Friday Deals for Days" encompassed the first and second weekends of November and will include the fourth weekend too, with the deals appearing online Wednesdays.
Although it's pushing people to shop online and use its curbside pickup option, shoppers that go to its stores won't experience the pandemonium of the past. Instead, they will form single-file lines at the entrance and be given sanitized shopping carts. "Health Ambassadors" will be stationed at entrances to remind people to put on their masks. Social distancing will be enforced inside with capacity controls and one-way lanes.
https://www.cnn.com/2020/11/15/business ... index.html

[iamlucky13]

It's fascinating that the virus daily case count has grown by leaps and bounds in the last week, exceeding 100,000 per day several times.

But the equity markets just keep on plowing ahead. S&P and Nasdaq are both 2-3% off all time highs.

I don’t understand your frustration:). Market basically still flat for the year! Did earth stopped spinning? All companies closed for business? Or you just assumed that if restaurants and barbershops had lost lot’s of business and they represent the majority of S&P500?

At the start of the year, the US market was at its highest point ever.

Since then, VTSAX has returned another 12.6%. The S&P 500 price is up almost 11%. Above average returns are not flat.

How is it hard to understand why many of us are confused? We're seeing above average growth on top of already record-setting levels at a time when a pandemic is on pace to reduce the GDP by about 4% for the year, and a non-trivial percentage of the economic activity that is continuing is funded by a mix of trillions of dollars of corporate and federal debt.

I accept that those circumstances don't automatically spell economic catastrophe, and I recognize that a lot of investors are looking to the stock market in part because expected bond returns are low.

That is not enough of an understanding on my part to be very confident that the market is well valued (regardless of whether it is efficiently valued). I'm still along for the ride, because my long term plan acknowledges the market may crash very hard from a position like this and take a long time to recover.

[7eight9]

Potentially more bad news for the gaming industry.

Casinos in Michigan are closing for at least three weeks in an attempt to control the spread of COVID-19 — a move that gaming industry experts see as potentially a sign of things to come for casinos in Las Vegas. ...
“It is hard to imagine a world in which we don’t see more restrictive operating environments for U.S. retail casinos across the next two quarters,” according to Chris Grove, a financial analyst with Eilers & Krejcik Gaming. “The only questions are how restrictive measures will be and what specific form those measures will take.”

Maybe the way to play this is to look for operators with less (or no) US exposure.

[LadyGeek]

I removed a post discussing the coronavirus. As a reminder, the main intent of the post must be on topic.

See: Please read before posting on coronavirus/COVID-19

[bling]

are we getting a 2nd chance to market time?

i think it was around this time last year when the first reports of the virus were coming from China. now there's a new strain reported in the UK that's way more infectious. so far they're saying that the vaccines will be effective against this strain.

anyone planning on making changes based on this news?

[Stinky]

are we getting a 2nd chance to market time?

i think it was around this time last year when the first reports of the virus were coming from China. now there's a new strain reported in the UK that's way more infectious. so far they're saying that the vaccines will be effective against this strain.

anyone planning on making changes based on this news?

I look at this as a possible second chance to tax loss harvest.

But my TSM shares are up a whole lot from when I bought them in March. So TLH for me is a mere shimmer in the far, far distance. The market will need to fall a long way before TLH is possible.

No market timing for me.

[lostdog]

Just a temporary blip since the vaccine covers it.

Weeding out the Chicken Littles again.

[LadyGeek]

I removed several posts discussing the coronavirus. As a reminder, the main intent of the post must be on topic.

See: Please read before posting on coronavirus/COVID-19

[Tony-S]

are we getting a 2nd chance to market time?

i think it was around this time last year when the first reports of the virus were coming from China. now there's a new strain reported in the UK that's way more infectious. so far they're saying that the vaccines will be effective against this strain.

anyone planning on making changes based on this news?

The mutation in the UK is not affecting my investing. After all, it's increased "infectiousness" is based upon modeling studies and not actual experimental or epidemiological studies. Keep in mind, modelers are like weathermen - they are wrong more than half the time yet not only keep their jobs, but get pay raises!

Of course, once enough epidemiological data are collected it could turn out the virus is more transmissible, but even then it's unlikely to impact my investing because this has no impact on vaccine efficacy. The seemingly important mutations are outside the receptor binding domain of the virus spike protein.

[nigel_ht]

are we getting a 2nd chance to market time?

i think it was around this time last year when the first reports of the virus were coming from China. now there's a new strain reported in the UK that's way more infectious. so far they're saying that the vaccines will be effective against this strain.

anyone planning on making changes based on this news?

Lol...same plan but sure would love to see another one month crash. I have some new money sitting in the sidelines being DCA'd in.

[F150HD]

Am sure we've all heard this Europe back in lockdown due to Covid-19

My wonderings....what happens in Europe eventually comes to the US (well, it did last time)

Do you believe this will cause another big market dive? will Cities start to shut down again etc?


(post is not about discussing the virus, rather its possible effect on our markets)

[Stinky]

Am sure we've all heard this Europe back in lockdown due to Covid-19

My wonderings....what happens in Europe eventually comes to the US (well, it did last time)

Do you believe this will cause another big market dive? will Cities start to shut down again etc?


(post is not about discussing the virus, rather its possible effect on our markets)

No, I don’t think there will be a big market dive.

Mr Market thinks that widespread vaccine distribution is soon at hand, and is expecting an economic recovery soon

If we have a “Europe” situation, Mr Market doesn’t think it will last very long.

[Cautionary Tale]

People were shocked in March. We're so numb to the coronavirus by now I think we've developed a tendency to shrug off every new piece of bad news.

[H-Town]

Am sure we've all heard this Europe back in lockdown due to Covid-19

My wonderings....what happens in Europe eventually comes to the US (well, it did last time)

Do you believe this will cause another big market dive? will Cities start to shut down again etc?


(post is not about discussing the virus, rather its possible effect on our markets)

Do you mean QQQ and “work from home” stocks will rocket once again?

Many tried to time the market back then. Look up old threads. We haven’t heard back from them again.

[Hebell]

Given we've had three significant mutations in the course of a year, I can see significantly suppressed GDP grinding along for a long time. With many countries caught in a perpetual catch-up cycle with vaccine rollout, in order to try to normalize their economy, but not getting ahead of it.

Debt financing can probably continue for some time. To date, the cash is sloshed into assets and buoyed this market. I don't think that can continue in perpetuity.

I can envision us on a bit of a plateau for a while, with a grind downward. And during that downward grind, probably some excellent opportunities for some high-tech flyers, if you can just grab the right ones! There are mutual funds that focus on disruptors, so that's probably a good place to start.

As a retiree, it's difficult with one's Bond portfolio, because you worry about the credit worthiness of your holdings, and just how well they will fare during this (I predict) LONG transition. In the past year, this has led me to be quite conservative, using only bonds with fixed maturity dates (tips, I bonds, EEs, bullet shares) and MYGAs.

For ultra shorts, I am looking to tip to ones with more international holdings because I am worried about the US covid response.

[LadyGeek]

I removed an off-topic post discussing the benefits of a diet (medical advice). As a reminder, see: Medical Issues

Questions on medical issues are beyond the scope of the forum. If you are looking for medical information online, I suggest you start with the Medical Library Association's User's Guide to Finding and Evaluating Health Information on the Web which, in addition to providing guidance on evaluating health information, includes a list of their top recommended sites.

Please stay on-topic, which is the market.