Why is the market up today?

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Meaty
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Why is the market up today?

Post by Meaty » Mon Mar 30, 2020 2:30 pm

I can’t figure it out. An extra month of social distancing guidelines, the FED predicting 30+% unemployment, cases still increasing, etc and the equity market is up.

Was all of this horrendous news really baked in?
"Discipline equals Freedom" - Jocko Willink

Hyperchicken
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Re: Why is the market up today?

Post by Hyperchicken » Mon Mar 30, 2020 2:31 pm


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Mountain Doc
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Re: Why is the market up today?

Post by Mountain Doc » Mon Mar 30, 2020 2:32 pm

Meaty wrote:
Mon Mar 30, 2020 2:30 pm
Was all of this horrendous news really baked in?
Yes

theorist
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Re: Why is the market up today?

Post by theorist » Mon Mar 30, 2020 2:35 pm

I think both the extended hiatus and the case statistics are now turning into good news for the economy.

— almost everyone knowledgeable said reopening stores on April 12 would be a disaster. It would cause rapid re-acceleration of case growth followed by another immediate shutdown. The delay out to April 30 can make a big difference on this, though more may be needed. Sane policy is good for the economy.

— everyone already knows case growth is still happening, that is clearly baked in. The curves are however now decelerating in many or most parts of the U.S., i.e. starting to visibly flatten. This is good news, not bad, even though absolute numbers are growing.

Of course probably the market is doing what it wants for other reasons and these are just my rationalizations! 🙂

H-Town
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Re: Why is the market up today?

Post by H-Town » Mon Mar 30, 2020 2:35 pm

Meaty wrote:
Mon Mar 30, 2020 2:30 pm
I can’t figure it out. An extra month of social distancing guidelines, the FED predicting 30+% unemployment, cases still increasing, etc and the equity market is up.

Was all of this horrendous news really baked in?
No.

You don't need to figure it out if you follow Boglehead investing principle. It's a thing of beauty.

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Stinky
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Re: Why is the market up today?

Post by Stinky » Tue Mar 31, 2020 7:06 am

Meaty wrote:
Mon Mar 30, 2020 2:30 pm
I can’t figure it out. An extra month of social distancing guidelines, the FED predicting 30+% unemployment, cases still increasing, etc and the equity market is up.

Was all of this horrendous news really baked in?
A lot of daily market moves seem nonsensical. For example, the market plunged horrendously last Monday 3/23/20, then has risen 17% since then in the face of all of the news of the last week.

I observe the daily news and market moves, but don't obsess over them. I have an asset allocation plan and stick to it, so daily market moves don't cause me to rejigger my investments.
It's a GREAT day to be alive - Travis Tritt

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Meaty
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Re: Why is the market up today?

Post by Meaty » Tue Mar 31, 2020 7:12 am

H-Town wrote:
Mon Mar 30, 2020 2:35 pm
Meaty wrote:
Mon Mar 30, 2020 2:30 pm
I can’t figure it out. An extra month of social distancing guidelines, the FED predicting 30+% unemployment, cases still increasing, etc and the equity market is up.

Was all of this horrendous news really baked in?
No.

You don't need to figure it out if you follow Boglehead investing principle. It's a thing of beauty.
Agreed but as a guy with an Econ degree it’s truly fascinating.
"Discipline equals Freedom" - Jocko Willink

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JoMoney
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Re: Why is the market up today?

Post by JoMoney » Tue Mar 31, 2020 7:21 am

I'm of the opinion that a lot of the assets that moved to cash, decided that cash wasn't a good investment, and are now in a predicament of trying to beat others that got out (along with all the new money that eventually makes its way to savers) back in.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

jpmorganfunds
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Re: Why is the market up today?

Post by jpmorganfunds » Tue Mar 31, 2020 10:46 am

According to JPMorgan estimates, balanced or 60:40 mutual funds, a $1.5tr universe in the US and $4.5tr universe globally, need to buy around $300 billion of equities to fully rebalance to 60% equity allocation.

At the same time the $7.5 trillion universe of US defined benefit plans, would need to buy $400 billion to fully rebalance and revert to pre-virus equity allocations.

Finally, there are the "balanced" sovereign pension funds such as Norges bank and GPIF, which before the correction had assets of around $1.1tr and $1.5tr, respectively, and which according to JPM would need to buy around $150 billion equities to fully revert to their target equity allocations of 70% and 50%, respectively.

https://www.zerohedge.com/markets/trade ... yer-market

tibbitts
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Re: Why is the market up today?

Post by tibbitts » Tue Mar 31, 2020 10:50 am

Meaty wrote:
Mon Mar 30, 2020 2:30 pm
I can’t figure it out. An extra month of social distancing guidelines, the FED predicting 30+% unemployment, cases still increasing, etc and the equity market is up.

Was all of this horrendous news really baked in?
The real question is why are people asking why the equity market is up (or down)?

livesoft
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Re: Why is the market up today?

Post by livesoft » Tue Mar 31, 2020 10:52 am

China business news was positive today. What's good for China is good for the World.
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aristotelian
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Re: Why is the market up today?

Post by aristotelian » Tue Mar 31, 2020 10:59 am

Meaty wrote:
Mon Mar 30, 2020 2:30 pm
I can’t figure it out. An extra month of social distancing guidelines, the FED predicting 30+% unemployment, cases still increasing, etc and the equity market is up.

Was all of this horrendous news really baked in?
You must be a glass half empty person. The other perspective is China is back online and the U.S. could follow as soon as May.

New cases in Italy are down to the lowest number in two weeks.

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greg24
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Re: Why is the market up today?

Post by greg24 » Tue Mar 31, 2020 11:00 am

Animal spirits are amplifying every bit of news.

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HomerJ
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Re: Why is the market up today?

Post by HomerJ » Tue Mar 31, 2020 11:03 am

Meaty wrote:
Mon Mar 30, 2020 2:30 pm
I can’t figure it out. An extra month of social distancing guidelines, the FED predicting 30+% unemployment, cases still increasing, etc and the equity market is up.

Was all of this horrendous news really baked in?
Yes.

Did the FED predict 30%+ unemployment today? Was that new information today?

Or was leaked a while ago, and now the market has it baked in? People sold on that news a while back.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

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Sheepdog
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Re: Why is the market up today?

Post by Sheepdog » Tue Mar 31, 2020 11:10 am

In this published article on MarketWatch today https://www.marketwatch.com/story/guid/ ... =rss&rss=1
That’s Jeremy Siegel, a professor of finance at the University of Pennsylvania’s Wharton School of Business, expressing some optimism Monday about the outlook for a stock market that may be starting to reassert a bullish stance after a punishing month.

During a phone interview on CNBC, the professor said he thinks the stock market may have put in its bottom last week.
Don't believe it until you feel it.
“One moment of patience may ward off great disaster. One moment of impatience may ruin a whole life.” — Chinese Proverb

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eye.surgeon
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Re: Why is the market up today?

Post by eye.surgeon » Tue Mar 31, 2020 11:13 am

Meaty wrote:
Mon Mar 30, 2020 2:30 pm
I can’t figure it out. An extra month of social distancing guidelines, the FED predicting 30+% unemployment, cases still increasing, etc and the equity market is up.

Was all of this horrendous news really baked in?
My guess is that with every passing day the impact of this is becoming more predicable. Markets like predictability even if it's calamity that is predictable. Many investors are looking at the end game of covid-19 at this point as being more predictable than the outcome of the banking crisis in 2008.
"I would rather be certain of a good return than hopeful of a great one" | Warren Buffett

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btq96r
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Re: Why is the market up today?

Post by btq96r » Tue Mar 31, 2020 11:16 am

The market isn't going to present a logical picture if you're looking at a single day. The reason long game investing works is because the longer a period you are viewing/investing, the more realistic the results are going to be with what's actually happening.
Moderation is for Canadians.

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meowcat
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Re: Why is the market up today?

Post by meowcat » Tue Mar 31, 2020 11:58 am

That's just the market, completely random and unpredictable.
More people should learn to tell their dollars where to go instead of asking them where they went. | -Roger Babson

am
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Re: Why is the market up today?

Post by am » Tue Mar 31, 2020 12:15 pm

Sheepdog wrote:
Tue Mar 31, 2020 11:10 am
In this published article on MarketWatch today https://www.marketwatch.com/story/guid/ ... =rss&rss=1
That’s Jeremy Siegel, a professor of finance at the University of Pennsylvania’s Wharton School of Business, expressing some optimism Monday about the outlook for a stock market that may be starting to reassert a bullish stance after a punishing month.

During a phone interview on CNBC, the professor said he thinks the stock market may have put in its bottom last week.
Don't believe it until you feel it.
Bear rallies happen all the time we will see. Stimulus gas pedal to the floor with 0% rates and 2 trillion infusion. Plus more to likely come. Talk of fed buying stocks.

Also market now down as grim news comes in from New York and the world.

t00sl0w
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Re: Why is the market up today?

Post by t00sl0w » Tue Mar 31, 2020 12:28 pm

the market is so disconnected from reality its insane.

Everyone I know is suffering from either already being laid off/furloughed or is heading that way and at this point we have no end in sight in this country.

And this spans multiple industries, even those that work in hospitals lately due to them shutting down elective procedures.

what happens when every household has one or more income earners shut down?

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HomerJ
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Re: Why is the market up today?

Post by HomerJ » Tue Mar 31, 2020 12:31 pm

t00sl0w wrote:
Tue Mar 31, 2020 12:28 pm
the market is so disconnected from reality its insane.

Everyone I know is suffering from either already being laid off/furloughed or is heading that way and at this point we have no end in sight in this country.
There is an end in sight.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

Jebediah
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Re: Why is the market up today?

Post by Jebediah » Tue Mar 31, 2020 12:45 pm

HomerJ wrote:
Tue Mar 31, 2020 12:31 pm
t00sl0w wrote:
Tue Mar 31, 2020 12:28 pm
the market is so disconnected from reality its insane.

Everyone I know is suffering from either already being laid off/furloughed or is heading that way and at this point we have no end in sight in this country.
There is an end in sight.
Not really. Nobody's quite sure how to phase normalcy back in or how long it'll take. Full normalcy more or less requires a vaccine. 2-3 months seems like the best case (unlikely) minimum required to just begin relaxing a little. Market is still thinking "Easter".

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Re: Why is the market up today?

Post by New Providence » Tue Mar 31, 2020 2:47 pm

Jebediah wrote:
Tue Mar 31, 2020 12:45 pm
HomerJ wrote:
Tue Mar 31, 2020 12:31 pm
t00sl0w wrote:
Tue Mar 31, 2020 12:28 pm
the market is so disconnected from reality its insane.

Everyone I know is suffering from either already being laid off/furloughed or is heading that way and at this point we have no end in sight in this country.
There is an end in sight.
Not really. Nobody's quite sure how to phase normalcy back in or how long it'll take. Full normalcy more or less requires a vaccine. 2-3 months seems like the best case (unlikely) minimum required to just begin relaxing a little. Market is still thinking "Easter".
We went from this is just like the flu, to the worst is over. We are in the middle of it.

peskypesky
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Re: Why is the market up today?

Post by peskypesky » Tue Mar 31, 2020 4:42 pm

HomerJ wrote:
Tue Mar 31, 2020 12:31 pm
t00sl0w wrote:
Tue Mar 31, 2020 12:28 pm
the market is so disconnected from reality its insane.

Everyone I know is suffering from either already being laid off/furloughed or is heading that way and at this point we have no end in sight in this country.
There is an end in sight.
:oops:

fatcoffeedrinker
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Re: Why is the market up today?

Post by fatcoffeedrinker » Tue Mar 31, 2020 4:56 pm

t00sl0w wrote:
Tue Mar 31, 2020 12:28 pm
the market is so disconnected from reality its insane.

Everyone I know is suffering from either already being laid off/furloughed or is heading that way and at this point we have no end in sight in this country.

And this spans multiple industries, even those that work in hospitals lately due to them shutting down elective procedures.

what happens when every household has one or more income earners shut down?
And all those people can sign up for unemployment benefits and the other benefits of the stimulus package. It may not be equivalent to the salary lost, but it may keep a lot of people out of dire straits.

Rus In Urbe
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Re: Why is the market up today?

Post by Rus In Urbe » Tue Mar 31, 2020 5:07 pm

*
My crystal ball says we have only just glimpsed the beginning....if you look at 100 years of the market (say, Dow, since it's easier to see), you'll see how long these things last. They Bungee-jump downward with some dead cats and dead bulls. When everyone is screaming that "This Time Is Really Different, It Will Never Come Back!!!!," then you know you've hit bottom.

But that's just my crystal ball. And my experience of the past (which is NO INDICATION OF FUTURE RETURNS!)

Meanwhile. STC your plan and AA.

Cheers! Rus. :beer
I'd like to live as a poor man with lots of money. ~Pablo Picasso

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