US Economic News

[Behappyalways]

U.S. Stock Market Appears Most Vulnerable to Virus Shock
https://www.bloomberg.com/opinion/articl...nd=opinion

[karlmarx]

With such a big correction, it looks like the hot money in Asia are going to move even faster out of the region. Some of the local stocks inflated by hot money in the previous year may start seeing larger sell-downs.

[Bibi]

With such a big correction, it looks like the hot money in Asia are going to move even faster out of the region. Some of the local stocks inflated by hot money in the previous year may start seeing larger sell-downs.

Which local stocks have been inflated by hot money? I tot out local STI fare very badly for the past decade compared to dow even indonesia index. Even our local banks pe are lesser than USA ones despite giving out higher dividends. Interest rate is getting lower, there isnt much places for investors to put their money to earn higher rates.

[Behappyalways]

We are kinda in a perfect storm where we have overvalued markets(Euro and US markets broke record high just a week or two ago even though Euro economies for example barely grew last year), high leverage on companies and low interest rates. If one of the big euro bank would to collapse, how would things turn out???


“The Fed is fairly impotent in this environment,” Minerd, 60, said during a Bloomberg Television interview on Thursday.

Guggenheim’s Scott Minerd Says Coronavirus May Be Worst Event in His Career
https://finance.yahoo.com/news/guggenhei...02465.html

[BlueKelah]

[Image: 153848561945633178fa231]
Ray Dalio has been warning about Central banks printing and devaluation of currencies worldwide. 
"CASH IS TRASH" even the USD .

[Behappyalways]

The Four-Stage Impacts of the Coronavirus
https://www.bloomberg.com/opinion/articl...nd=opinion

[dreamybear]

The recent correction has resulted in quite a number of stocks(in NYSE/HKEX/SGX) on my watchlist going below my target accumulation prices.

I find myself with a conundrum : Taking a leaf out of Hamlet - "To buy, or not to buy, that is the question".

Is this going to be a short-lived correction ? Will there be more money printing or other matters that cld provide immediate relief ?
If it is going to be a longer term bear mkt phase leading to an eventual economic recession, wld it be better to hold off stock purchases to take advantage of the property correction instead. 

Wonder if I am the only one here having such thoughts.

In the short span of our human lives, we do not get that many opportunities - it's tough making every precious one count meaningfully.

"Que sera, sera, Whatever will be, will be, The future's not ours to see ...."

Fed Officials Open Door to Rate Cuts as Coronavirus Risks Rise
https://www.nytimes.com/2020/02/28/busin...virus.html

[BlueKelah]

The recent correction has resulted in quite a number of stocks(in NYSE/HKEX/SGX) on my watchlist going below my target accumulation prices.

I find myself with a conundrum : Taking a leaf out of Hamlet - "To buy, or not to buy, that is the question".

Is this going to be a short-lived correction ? Will there be more money printing or other matters that cld provide immediate relief ?
If it is going to be a longer term bear mkt phase leading to an eventual economic recession, wld it be better to hold off stock purchases to  take advantage of the property correction instead. 

Wonder if I am the only one here having such thoughts.

In the short span of our human lives, we do not get that many opportunities - it's tough making every precious one count meaningfully.

"Que sera, sera, Whatever will be, will be, The future's not ours to see ...."

Fed Officials Open Door to Rate Cuts as Coronavirus Risks Rise
https://www.nytimes.com/2020/02/28/busin...virus.html

FED will do rate cut this time to negative interest rates and go back to QE but its not gonna work as no demand for their debt due to virus. And lower rates doesnt work when country is shutdown. Virus is probably spreading fast in USA as we speak, will know next week as CDC is testing thousands this weekend due to that Korean air stewardess with COVID working los angeles to korea flights. 

China is poised to release some FEB numbers this weekend as well. I am thinking its gonna be really bad numbers for the PMI and other stuff. And now in a bid to restart factory many manufacturing provinces like guandong etc.. are all released from lock down even though they have thousands infected. Whilst publishing only 20 new cases in those provinces with thousands already affected and low deaths to cover up. Some people not showing up for work even when factory open. Only their steel factories in northern part is pumping out steel which no one wants. 

This correction will not be short lived. Black swan event is happening NOW! It will be very fun to finally see China become Japan 2.0 and see how a massive deleveraging occurs in worldwide markets. In fact lets hope we dont go into a prolonged 10 year bear market like has happened a couple times historically.

I am waiting about a month and when market is low volume and dirt cheap bottom thats when to strike. Elephant gun lock and loaded.

[karlmarx]

Which local stocks have been inflated by hot money? I tot out local STI fare very badly for the past decade compared to dow even indonesia index. Even our local banks pe are lesser than USA ones despite giving out higher dividends. Interest rate is getting lower, there isnt much places for investors to put their money to earn higher rates.

If you were a fund manager and you're looking for securities with cash-like characteristics -- to allow you to enter/exit easily and earn a higher return on your 'hot money' -- you will likely be looking for securities which have:

a) high liquidity
b) high yield
c) stable/predictable operating business

Which are the securities with such characteristics?

===

When there's too much money chasing too few assets, it is quite natural to expect asset values to rise. When asset values get too high, it is again quite natural for the market to get more nervous as the valuation become increasingly ridiculous. And when they get nervous, they all rush for the exit upon seeing a group starting to make their way out. It's just like the rush to buy toilet paper; nobody wants to be the last one with no toilet paper to buy.

While interest rates have been low, it doesn't mean that asset values, as some may believe, can only go higher. This is particularly so for assets which are deteriorating in productive quality, assets whose productive quality is only/mostly speculative, and assets whose price have risen faster than its productive quality.

[karlmarx]

The recent correction has resulted in quite a number of stocks(in NYSE/HKEX/SGX) on my watchlist going below my target accumulation prices.

I find myself with a conundrum : Taking a leaf out of Hamlet - "To buy, or not to buy, that is the question".

Is this going to be a short-lived correction ? Will there be more money printing or other matters that cld provide immediate relief ?
If it is going to be a longer term bear mkt phase leading to an eventual economic recession, wld it be better to hold off stock purchases to  take advantage of the property correction instead. 

Wonder if I am the only one here having such thoughts.

In the short span of our human lives, we do not get that many opportunities - it's tough making every precious one count meaningfully.

"Que sera, sera, Whatever will be, will be, The future's not ours to see ...."

Fed Officials Open Door to Rate Cuts as Coronavirus Risks Rise
https://www.nytimes.com/2020/02/28/busin...virus.html

If there are certain answers to these questions, the markets will not be at where they are now. I think it is best to forget about them.

Those who have interest in (and hence knowledge of) the market will not be waiting with 100% cash just for that day to come. The hardest thing to do is to sit still and do nothing.

It's a very seductive thought that one can successfully time the market bottom and 'make it big' when the recovery comes. The reason you don't hear of such things is because very few people have actually made their fortunes by going all-in during a deep market sell-off. Those that manage to pull if off should be considered very lucky. Lest we forget, let us be reminded that there is no known way to predict the market tops/bottoms. 

While we cannot tell where the top/bottom is, it should not be difficult for a somewhat skilled investor to tell whether asset valuations are cheap or expensive. I think that if an investor has managed to buy when it is cheap, or sell when it is expensive, then he/she should do pretty alright. If you only wish to buy when it is at the cheapest, and sell only when it is at the most expensive -- which is what most investors expect -- there will likely be plenty of disappointments with missed opportunities (i.e. ahhh, should have sold it last week!). 

Being exposed to such disappointments are natural and to be expected, but how frequent do you wish to be exposed to such potentially damaging emotions?

My take is, as always, the same; buy when you think it is cheap. If you are out of cash, just wait, or switch from the more fairly-valued assets to the more under-valued ones. If you find that the price of the assets you have purchased have continued to fall far further than what you paid for, you may have to reassess whether you have valued the assets correctly, and given sufficient margin of safety not just in terms of purchase price, but also to possible deterioration in asset quality.

Even after the correction, SGX-listed stocks -- both big and small caps -- still don't look cheap enough to me. On the other hand, HKEX-listed stocks, due to their higher exposure to the mainland and HK economy, look far cheaper.