With all the looming quarantine and lockdown measures in place, we’re about to see some rather pronounced changes in our world, and some of them could even turn out to be long-lasting. First off, we’re about to see a grand experiment in working from home. Disclaimer: this is not financial or trading advice!
Are most people going to be productive? Not necessarily, because these are special circumstances. Currently, a lot of people are going to be spending a lot of time reading the news and staying in touch with family. Building up a capacity to focus, stay disciplined and maintain a routine, all takes time. Uncomfortable phone calls with clients or partners is probably something everyone will do better at, when no one else is listening in. If you’re working against a tight deadline, you can probably do without the distractions that come with a regular office.
In the previous episode, I mentioned that I expected financial turmoil, and we certainly got it — and I don’t think we’ve bottomed yet. You might get some interim legs up (and bear market rallies can be quite extreme), but the prevailing trend I believe is down. Full disclosure: I have closed out some of my short positions in the S&P and Euro Stoxx 50.
One asset that really got creamed over the past week, is Bitcoin — and the greater crypto space. I’m a cautious buyer at these levels, but we could go back below $4k (but that would be a very quick return trip). How the financial scenarios play out, all comes down to the response from the Fed and the ECB. The Fed announced more funbux coming. So far, the markets have effectively shrugged this off, which is a bad, bad sign for the efficacy of monetary policy. But that does not mean they are going to stop. The trillions will keep coming, and that could help drive stocks artificially higher.
It’s fairly obvious at this point, that the business cycle peak is behind us, and that’s not going to be reversed any time soon. Are you working from home? Are you short the market? Are you buying gold? What else do you think I should be talking about in this new post-apocalyptic economy? Email me on podcast@nyman.media!
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