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Message
Why hasn't the stock market completely crashed?
Posted on 4/3/20 at 11:48 am
Posted on 4/3/20 at 11:48 am
I know it's down approximately 30% from the high but with the continued uncertainty why hasn't the market completely tanked? We're talking 10 million Americans who've recently applied for unemployment benefits. Some experts are saying GDP in the 2nd-4th quarter is going to be a negative range of -10 to -30%. I understand the markets are forward looking 3-6-12 months out but we're not getting any indication from our government experts that a green light for Americans returning to work is anywhere on the economic horizon, that fact alone is truly unsettling uncertainty.
I was watching Fox Business News, they were talking about a minimum of 3-5% of all small businesses currently shut down from the pandemic will not survive and that percentage will become much larger if this economic shutdown continues another 6-8 weeks. I'm currently 35-40% equities, I'm also working so I'm not overly concerned about the market whip saw behavior but some of these folks who have already retired and didn't move their money into safe investments could be in serious trouble if this market drops 50-60-70%. Believe me, a lot of retired folks have been invested 70-80% or more in equities since the financial meltdown because they couldn't make much on fixed income investments and they became convinced that their investments would be fine through normal recessionary downturns......this ain't normal y'all!
I was watching Fox Business News, they were talking about a minimum of 3-5% of all small businesses currently shut down from the pandemic will not survive and that percentage will become much larger if this economic shutdown continues another 6-8 weeks. I'm currently 35-40% equities, I'm also working so I'm not overly concerned about the market whip saw behavior but some of these folks who have already retired and didn't move their money into safe investments could be in serious trouble if this market drops 50-60-70%. Believe me, a lot of retired folks have been invested 70-80% or more in equities since the financial meltdown because they couldn't make much on fixed income investments and they became convinced that their investments would be fine through normal recessionary downturns......this ain't normal y'all!
Posted on 4/3/20 at 11:50 am to Bass Tiger
Because Haha money printer go brrrr
Posted on 4/3/20 at 11:50 am to Bass Tiger
We are printing money, no need to right now.
If this goes past April, it could get nasty
If this goes past April, it could get nasty
Posted on 4/3/20 at 11:51 am to Bass Tiger
Because even if a million people died (most of them elderly/sick) it changes nothing long term economically assuming things eventually go back to normal.
Posted on 4/3/20 at 11:51 am to Bass Tiger
First down vote, someone must be retired and heavily invested in equities or they're a financial adviser.
Posted on 4/3/20 at 11:51 am to Bass Tiger
quote:Worst 1stQ in history
Why hasn't the stock market completely crashed?
Posted on 4/3/20 at 11:52 am to Bass Tiger
Circuit breakers. The System won't let itself crash. If the situation became dire they would suspend trading.
Posted on 4/3/20 at 11:53 am to OchoDedos
quote:
Circuit breakers. The System won't let itself crash. If the situation became dire they would suspend trading.
That's played a part
Posted on 4/3/20 at 11:53 am to Bass Tiger
quote:A lot of the disorder to date has been in the credit markets. The Fed/UST stepped in with all kinds of "support", but there is chaos in several sectors - mostly in structured credit (mortgage, corporate and ABS). We'll see what the TALF program brings when it finally gets off the ground.
Why hasn't the stock market completely crashed?
Some credit instruments are trading worse than they did in 2008/09, so in some sense, those markets HAVE completely crashed.
Posted on 4/3/20 at 11:53 am to Bass Tiger
quote:
I understand the markets are forward looking 3-6-12 months out but we're not getting any indication from our government experts that a green light for Americans returning to work is anywhere on the economic horizon, that fact alone is truly unsettling uncertainty.
Not true.
Posted on 4/3/20 at 11:53 am to Bass Tiger
quote:
Why hasn't the stock market completely crashed?
quote:
I know it's down approximately 30% from the high
Posted on 4/3/20 at 11:53 am to Bass Tiger
If everybody needed all of their cash today then the market would completely crash. As an investor who is more concerned about what the market will be 30 years from now, there's no reason to do anything at this point. This is all short term noise when you're talking decades of performance.
Posted on 4/3/20 at 11:55 am to Bass Tiger
Because the companies you have stock in are probably not going to disappear. IE, if you have oil stock in Exon, Chevron, etc. those companies are not going to shut down and your stock becomes worthless. They won't shut down because Circle K is not going to fill the void as a drilling company when this is over.
Companies go away if what they do becomes obsolete. Like Martha Stewart Inc.
Companies go away if what they do becomes obsolete. Like Martha Stewart Inc.
Posted on 4/3/20 at 11:56 am to Big Scrub TX
quote:
quote: Why hasn't the stock market completely crashed?
A lot of the disorder to date has been in the credit markets. The Fed/UST stepped in with all kinds of "support", but there is chaos in several sectors - mostly in structured credit (mortgage, corporate and ABS). We'll see what the TALF program brings when it finally gets off the ground. Some credit instruments are trading worse than they did in 2008/09, so in some sense, those markets HAVE completely crashed.
Yes, I think a lot of fragile underlying economic conditions are going to surface if this country remains in shutdown for another month or two.
Posted on 4/3/20 at 11:56 am to PEPE
quote:sort of.
Because even if a million people died (most of them elderly/sick) it changes nothing long term economically assuming things eventually go back to normal.
If this goes past April, we're going to need bank intervention far beyond 2008
Posted on 4/3/20 at 12:00 pm to Bass Tiger
the op is full of economy information. the stock market is not the economy.
Posted on 4/3/20 at 12:01 pm to Bass Tiger
Do you want it to crash?
Like to 0?
SMH
Like to 0?
SMH
Posted on 4/3/20 at 12:03 pm to Bass Tiger
its a betting mechanism.
people are betting some sectors do better than ever.
muh toilet paper.
and some bet that ordinary times will restore well run companies to top of money pyramid.
people are betting some sectors do better than ever.
muh toilet paper.
and some bet that ordinary times will restore well run companies to top of money pyramid.
Posted on 4/3/20 at 12:06 pm to CelticDog
Some heavy hitters posting in here.
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