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Couple thoughts as we kick off a new week:
1. Couple days of improvement data-wise in the number of infections and deaths. Hard to tell if this is “weekend effect” we’ve seen in previous weeks, or new trend starting
2. Because of this, don’t want to read too much into it 1/10
1. Couple days of improvement data-wise in the number of infections and deaths. Hard to tell if this is “weekend effect” we’ve seen in previous weeks, or new trend starting
2. Because of this, don’t want to read too much into it 1/10
3. I am hopeful that some of the distancing measures we’re taking have been working, but in Italy, it was a full month to go from 20% daily + growth to 3-5% daily growth
4. We have not implemented nationwide policies as strict, so I anticipate slower dip to that level 2/10
4. We have not implemented nationwide policies as strict, so I anticipate slower dip to that level 2/10
5. Biggest health risk right now is that people see improving data and think coast is clear and start getting a little lax with distancing in next 2-3 weeks
6. So mentally, try to stick with this puppy all the way through April 3/10
6. So mentally, try to stick with this puppy all the way through April 3/10
7. This buys us time to get more supplies, buys us time to hopefully get more people recovered and free up hospital space, and buys us time on testing and possible treatments. EVERY DAY YOU STAY HOME IS 1 DAY CLOSER TO NEW TREATMENTS 4/10
8. Now, this is where things get complicated from an investing perspective. We have the health scenario, which has been driving all of this. We then have the market scenario. And then we have the real economy scenario.
9. YOU HAVE TO DIFFERENTIATE BETWEEN THESE 5/10
9. YOU HAVE TO DIFFERENTIATE BETWEEN THESE 5/10
10. For example, I’ve seen a bunch of people saying, “Gee, we’re going to 20% unemployment but we’re only 25% off market highs. What’s with that?”
11. Well, we have a new Fed regime with unlimited QE and $2T in fiscal stimulus from Congress. And there could be more coming 6/10
11. Well, we have a new Fed regime with unlimited QE and $2T in fiscal stimulus from Congress. And there could be more coming 6/10
12. So it’s very easy to see a scenario where health situation gets a little better, and markets start to anticipate traction on fiscal and monetary stimulus
13. But a relapse on the health side could throw this off-track, as the health side of things is still the driver 7/10
13. But a relapse on the health side could throw this off-track, as the health side of things is still the driver 7/10
14. But also, remember that just because stocks start anticipating traction doesn’t mean everyone is back to work. TON of work to be done here
15. Remember in 2008-09, markets recovered to previous highs within 4 years. But unemployment was still almost 2x prior 8/10
15. Remember in 2008-09, markets recovered to previous highs within 4 years. But unemployment was still almost 2x prior 8/10
16. In conclusion, additional monetary and fiscal stimulus has likely made markets more sensitive to potential good news on the upside, but might not reflect conditions on the ground
17. Still tough sledding ahead on healthcare, and based on China numbers, slow real recovery 9/10
17. Still tough sledding ahead on healthcare, and based on China numbers, slow real recovery 9/10
18. Biggest thing right now: DON’T GIVE UP THE FIGHT TOO EARLY. STAY HOME, DON’T GO NEAR PEOPLE, DON’T LICK ANYTHING
19. Let’s finish the job we started. Solve the health side of things, we solve the economic side of things.
WE DON’T QUIT AT HALFTIME
19. Let’s finish the job we started. Solve the health side of things, we solve the economic side of things.
WE DON’T QUIT AT HALFTIME
