Act Now Scene 1

Sunday Evening Review of Barrons – Last week it was “Crisis Playbook”. Throw that Playbook out the window. This week it’s “Act Now” (A message to congress, which as of Sunday night was unable to ‘act now.’)

An unprecedented public health crisis brought the economy to a halt, by anecdote if not report putting very many people out of work, and halting most commerce. At the same time, the financial market’s elements have been on full frontal plummet.

The connection between bonds and stocks has unwound. The government tried to prop up the bond market but the bond market falls along with the stocks – treasury yields rose as stocks dived. Gas by the gallon is selling for 99 cents in Kentucky. Even gold is going down. There is tremendous volatility in corporate debt and a feeling that margin calls are desperate for some.

Buyers are told to have a two-year horizon. Very large unemployment reports are expected. Only a very visible slow down of corona virus growth and deaths could leave breathing room for any market normalcy. For now, too abnormal to touch. – Baruch Bernard


Related
https://www.barrons.com/articles/what-is-going-on-with-the-stock-market-the-ride-wont-get-smoother-soon-51584751257
https://www.barrons.com/articles/higher-treasury-yields-send-hopeful-signal-to-markets-51584715555

On the week
DJIA -17.3%
S&P 500 -14.8%
Nasdaq -12.64%
Dollar -0.320%