Stocks

[Pimpin]

https://twitter.com/elerianm/status/1240812206620430337

WOW

 

[Adriano@10]

Yeah i saw that if i remember correctly that was the day where everything was down Gold, treasuries stocks....

Anyways looking at futures and europe and I do wonder if i missed something big, or if we re seeing a dead cat bounce.
Like why the fuck is europe and US futures trading as if we found a solution to the problem.

Also looks like bond markets and stock markets are disconnected just checked and bonds barely moved especially low investment grade and liquidity is still missing.
Not sure whats happening here either stock investors believe in a bailout more then bond investors or it s just retail pumping up stocks not sure.
But there clearly is something wrong when a stock jumps 20% in a day and it s bond is trading at a 50% discount with a nearly 9% yield and nobody wants it.


Also on a bigger picture it looks like here most the people who cannot work anymore atm are on 80% of their salary and confusion around who s gonna pay for what eventually is quite big.


I also wonder wtf cali is gonna do with all it s gig workers. I d guess that there s gonna be a huge amount of uber and lyft drivers that are pretty much fucked now. Now i wonder if seeing a huge amount of these workers demand gov ad might change states minds on how they let uber and lyft treat its workers.
I mean it s extremely comfortable for a company if you re peronel cost is cut automatically once revenue falls cause you only pay your workers if they make revenue. While for a society it might not be the most desirable thing to have.

Still gonna hold out till bonds settle also usually a will see some bankruptcies in a recession so i m gonna say we still have not seen the bottom yet. There one or two lehmans out there thats for sure.

Edit: https://www.wsj.com/articles/bond-market-strains-keep-traders-on-edge-11584696600?mod=hp_lead_pos3

Side note the chairman of the NYSE and his wife apparently sold a ton of stock after they got a corona briefing on jan 24 same goes for a whole bunch of us senators who got the same briefing.

I know it s not technically insider trading but to be selling all your shares while the president is telling the public this aint nothing seems a tiny bit sketchy


No idea how to post a direct screen shot so heres a link to a twitter feed on the bond prices again it s freaking scary:
https://twitter.com/pearkes/status/1240716805049548801

 

[brehme1989]

The idea here is that people want to convert to cash. Investing in bonds does not help there.

Many people are cashing out their stocks and others are looking at these new prices and jump in.
I'd say Hedge Funds are causing a lot of this turmoil as they are still heavily leveraged and can do whatever the fuck they want. And they don't want to buy bonds here. Hedge Funds don't want to sit on their cash so they smell blood in the equity market and dove in. The bond market seems far more connected to reality than the equities and that's been the case for at least 3 years now. The stocks valuations barely made any sense.

I can't really complain, as my shares portfolio in pre-market now is at +11% in just a day What a fucking rollercoaster!

 

[Adriano@10]

I agree that the bond market seems more connected to reality.
I m just pointing out that it makes 0 sense to pille into the more risky asset (stocks) while avoiding the less risky one (bonds). Note i m talking about binds and stocks of the very same company.
Especially if the bonds trade at 40% discount and have maturity of less than 1 year...

 

[brehme1989]

Yeah I know it's a shit. There's close to zero liquidity in the bond market and I learned that the hard way

 

[Adriano@10]

Reports coming out of the us (not official yet), that jobless claims will show a record increase and generally a record level at 2.25 mio.
If this turns out to be the case we re in for a rough ride.


Edit: So it begins: https://www.daytondailynews.com/new...o-unemployment-claims/1jalUcMSyP2dVnMM6g7NKO/

Ohio went from 5420 jobless claims last week to almost 78000 this week.......


EDIT 2: Once again markets reversed S&P 500 went from up 3%+ in pre market trading to 1% down.
I need to hire an intern that just plays the curb your enthusiasm theme song every time i check market.

Edit 3: https://twitter.com/MarriottIntl/status/1240639160148529160
CEO of mariott on the crisis must watch if your invested in the travel industry.
Calls it a worse crisis than the GFC and 9/11 combined for his industry......

 

[Pimpin]

..yet Hyatt is up 22 % today hahahah

- - - Updated - - -

Do people, those who call to buy the dip, realise that the economy is at a standstill? How can anything be up 20%? There's CEO's of airlines talking about bankruptcies, yet stock of same companies are up 20% (EasyJet).

 

[brehme1989]

The rally is based on the expectation that the government's "rescue" package will be huge, immense and gigantic all at once.

Next week the markets will suffer.

 

[Pimpin]

I have a friend at adm and he is telling me for months how trucks have been cancelled, millions of euros worht of stock just his orders. The economy is

 

[Adriano@10]

Holy fuck crude at 19.84$.......

 

[brehme1989]

Holy fuck crude at 19.84$.......

Thank fuck I offloaded that shit at $24.50.

It rebounded to $23 I think but still, not the kind of gamble I'm willing to take for the long run yet.

 

[Pimpin]

how much lower can oil go? Like at what point do countries start bankrupting?

I have not done research on it for a while, I remember reading at white price they break even and the volume they'd need to not run deficits. I can recall there was an article on ft like a week ago or so. Just found it, here's the graph

Russia does have a floating currency and reasonable amount of reserves (there's never enough reserves) so it can bear the cost for a few months. I can see rouble is collapsing though that ironically would make russian lng even cheaper and rest of russian products more competitive. With miserable living conditions that would ensue with foreign goods getting more expensive, I do not know for how long the russian ppl will take the patriotic bs before they revolt. (Putin did push thru for new constitution that would see him president for an eternity and did promise hundreds of billion dollars investments, so I don't know how feasible low prices are). Lets see who cracks first.


Saudi Arabia has very, very low break-even price though it does depend quite alot on oil.

Venezuela will get alarming, I think it is about time for a regime change there. Other countries will get hit, like Iran since we are talking of regime changes . Iraq and Nigeria will get pretty bad.


But yes, 20$ barrels long term will never be a reality ( I really do hope this doesn't age badly )

 

[crzdcolombian]

Some stocks trading at all time High those I sold and am
Ready to jump in but yea it’s still going to get much much worse

Some of my stocks lost 40%+ before the 1st deaths were announced in USA. We still don’t have testing kits and almost every state is closed. So things will be tanking way more in the coming weeks.

A ton of great deals now. I see people saying wow GE under $7. Ok it was a $10 stock for past 2 years. Went down 30%. It can be a $1 stock in 2 weeks when the US actual infected numbers start popping up.

 

[Adriano@10]

Yeah what crzd said, like shiller p/e is getting to a place where i d feel comfortable investing again but the data is still pre crisis at least the earnings are not adjusted to the new reality jet id expect earnings to take at least a 20% drop across the board maybe even more.

Also Switzerland yesterday layed out it s rescue package gonna be 32 bio s initially. Their gonna distribute it through the banks so the idea is that all the self employed and SMEs can go to their regular bank and get a cheap loan fast. Alll loans up to 500k will be 100% backed by the government all loans from 500k to 20 mio the bank will have to take 15 % of the risk on and all bigger loans over 20mio will be handled directly by the government.
Thay also basically indicated that they expect at least one really big one to need money.

I like this solution especially since it will be fast for SME s and banks will have a incentive to loan money as they ll make a small profit off these loans with almost no risks. This will also ensure that money arrives fast as banks usually already know the CF situations of the companies they serve anyways so checking if the requested amount is reasonable to cover costs should be way faster than if it would be handled by the gov.

It s not the perfect solution but i think it s a pretty good one for those who need cash fast. They have not announced the interest rates on those loans yet but i expect them to be in the 0.25 range. They also said that those 32 bio is just the initial funds they freed and that they are ready to increase that amount if necessary.

Also germany announced a huge fiscal stimulus package.


In Tesla news panasonic announced that they ll shut down their battery production in texas for two weeks. Gonna be funny to see Elons reaction, when he refused to shut freemont down beside a order from the state.

 

[syrus]

Going to watch Shell over the next week or so
Waiting to see what the Saudi's Vs Russian turns out.

 

[brehme1989]

Limit down once more. Waiting for a deal between the Republicans and Democrats and if that happens guess, what? Probably limit up

 

[Pimpin]

it hit the limit down in seconds

 

[Adriano@10]

Everything green Nikkei up 7% and us futures 4%...
Not sure what was the trigger for that.
I hope it was not trump saying they ll get out of this fast cause if they stop the containment they ll be fucked........



all this on a day where euro pmis are shown to be lowest in history.....

also just to show how everybody curently is blind shopping today ubs new pt on tesla: to 420 from 410
and citi at the same time loewerd its tesla pt to 246.
Just saying.

A

 

[Pimpin]

why is bp up 15%? Why is the german auto-maker sector up 10% on average? Why are some british high street shops trading higher, in a day when the country is entering lockdown?

and as adriano said the eu just reported crash of activity to lowest level since..ever

 

[Adriano@10]

On another note i think i m gonna create a short term B rated bond pofo for the time being. They trade at a 20/30% discount the fed just started unlimited buybacks on us bonds rated BBB- or higher that have a term of 5 years or lower....

This significantly reduces default risks and if i get enough diversification i can afford to let one or two of em go bust and still make a profit a very small one if 2 goe bust though.
My rational is that the us is gonna save everybody that employs more than 10 people on the short run and i doubt they ll want to hurt bond holders through reconstruction as that would most likely also distort share prices.
It s a risky play but i think if i choose bonds with maturities under 2 years i should be fine.


Edit: LOL at the imf for saying it could lead to a recession when we re already in one https://www.wsj.com/articles/corona...ession-says-imf-11585046688?mod=hp_lead_pos11
great work as always......

EDit 2: forgot to mention it managed to listen in on a conference call by credit suisse where they addressed their bigger clients and briefed on the situation. It was mainly their chief investment officer Michaels Strobaek talking.
Key takeaways are that they expect us gdp to decline 12% in q2, they said while they are on the more conservative side they see significant downside risk to their GDP prediction.
He also said that they think it s ok to buy stocks again but that one has to be vigilant and that it is not time jet to invest into the general market, again saying downside risk is bigger than the potential upside atm. Strobaek said if you buy single stocks now he s sure you ll be very happy with the investment 3 to 5 years down the line. That time horizon scared me more then it gave me hope though.

They also recommended to look towards the tech sector and even more so tech that could be used in big fiscal projects.