Dow Futures down 4%

[ERICOPOLY]

Goldman Sachs:

 

50% of Americans will contract the virus (150m people) as it's very communicable. This is on a par with the common cold (Rhinovirus) of which there are about 200 strains and which the majority of Americans will get 2-4 per year.

 

...

 

There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.

 

 

50%?  Not if we're all staying home like right now.  We may not even reach 1% if we're all isolated at home, and thereby flattening the curve.  The price of such success is that, at that point, who's going to have the confidence to go outside again without having a vaccine in hand? 

 

And if we've got to wait 12-18 months for a vaccine?  Therefore, a bounce-back in the 2nd half of the year appears unlikely to occur.

 

[Viking]

Goldman Sachs:

 

50% of Americans will contract the virus (150m people) as it's very communicable. This is on a par with the common cold (Rhinovirus) of which there are about 200 strains and which the majority of Americans will get 2-4 per year.

 

...

 

There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.

 

 

50%?  Not if we're all staying home like right now.  We may not even reach 1% if we're all isolated at home, and thereby flattening the curve.  The price of such success is that, at that point, who's going to have the confidence to go outside again without having a vaccine in hand? 

 

And if we've got to wait 12-18 months for a vaccine?  Therefore, a bounce-back in the 2nd half of the year appears unlikely to occur.

 

Northern Italy locked down some cities where they had their first outbreak. The lock down did not seem to help those areas (their hospitals got overwhelmed). I am shocked that some countries in Europe have not taken more stringent measures before now as they seem to be 10-14 days in front of North America. It will be interesting to see how the UK does. I continue to think Washington State will be key to watch; do numbers keep increasing or does rate of increase start to slow due to measures taken. Lots we do not understand. Big tradeoffs.

[ERICOPOLY]

I listened to first 3 minutes of today’s news conference from the WH. I couldn’t stop laughing. He talks about incredible things happening with the virus spreading and we all come together for a big celebration. WTF?  Who wrote his speeches thr Monty Python troupe?  It’s basically Saturday night life....

 

“I’d rate it a 10,” Trump said at a White House press briefing Monday when asked by a reporter how he would rate his response to the pandemic.

 

https://thehill.com/homenews/administration/487883-trump-gives-himself-10-out-of-10-on-coronavirus-response

 

[enoch01]

I listened to first 3 minutes of today’s news conference from the WH. I couldn’t stop laughing. He talks about incredible things happening with the virus spreading and we all come together for a big celebration. WTF?  Who wrote his speeches thr Monty Python troupe?  It’s basically Saturday night life....

 

“I’d rate it a 10,” Trump said at a White House press briefing Monday when asked by a reporter how he would rate his response to the pandemic.

 

https://thehill.com/homenews/administration/487883-trump-gives-himself-10-out-of-10-on-coronavirus-response

 

Surprised he didn’t say “11”.  Notwithstanding, it was the most realistic conference so far, and for that reason offers a glimmer of hope that we will get our act together.

[Spekulatius]

I listened to first 3 minutes of today’s news conference from the WH. I couldn’t stop laughing. He talks about incredible things happening with the virus spreading and we all come together for a big celebration. WTF?  Who wrote his speeches thr Monty Python troupe?  It’s basically Saturday night life....

 

“I’d rate it a 10,” Trump said at a White House press briefing Monday when asked by a reporter how he would rate his response to the pandemic.

 

https://thehill.com/homenews/administration/487883-trump-gives-himself-10-out-of-10-on-coronavirus-response

 

I gave it a 9/10 for different reasons though. Turned it off after 3 minutes so I am glad to hear that it got a bit more substantial as the briefing progressed.

[ERICOPOLY]

“Last week, SPY recorded a $9Bn increase in shares outstanding, as new ETF shares were created for the purpose of lending it out to investors looking to short,” wrote JPMorgan strategists including Marko Kolanovic. “Thus, what looks like an inflow to the fund actually represents new shorts, rather than buying by fundamental investors.”

https://finance.yahoo.com/news/jpmorgan-sees-short-sellers-behind-134949596.html

 

 

Huh?  How could this not represent buying?  How did the shorts manage to sell these new shares without finding buyers?

 

 

[opihiman2]

I listened to first 3 minutes of today’s news conference from the WH. I couldn’t stop laughing. He talks about incredible things happening with the virus spreading and we all come together for a big celebration. WTF?  Who wrote his speeches thr Monty Python troupe?  It’s basically Saturday night life....

 

“I’d rate it a 10,” Trump said at a White House press briefing Monday when asked by a reporter how he would rate his response to the pandemic.

 

https://thehill.com/homenews/administration/487883-trump-gives-himself-10-out-of-10-on-coronavirus-response

 

Surprised he didn’t say “11”.

 

 

LoL! 

[Cigarbutt]

“Last week, SPY recorded a $9Bn increase in shares outstanding, as new ETF shares were created for the purpose of lending it out to investors looking to short,” wrote JPMorgan strategists including Marko Kolanovic. “Thus, what looks like an inflow to the fund actually represents new shorts, rather than buying by fundamental investors.”

https://finance.yahoo.com/news/jpmorgan-sees-short-sellers-behind-134949596.html

 

Huh?  How could this not represent buying?  How did the shorts manage to sell these new shares without finding buyers?

When you sell a share short in the market (uptick rule allowing), the intermediate participant borrows one from another investor. You’ve added selling pressure on the market. Covering goes in the opposite direction.

 

When you ask the intermediate participant to ‘create and lend’ an ETF share (if the short selling demand or “hedging” demand (unit creation) is higher than otherwise net general redemption demand from others) with the goal of short selling, the intermediate participant buys the underlying securities in the market and lends you the share for a (create-to-lend) higher fee. Selling the ETF share short puts selling pressure in the ETF market segment (without the resistance of the uptick rule) which is constantly held in balance by the intermediate participant. When you ultimately cover, the ETF share is sent back to the intermediate participant who then sells the underlying securities into the market, adding selling pressure.

 

At least, that’s my understanding. If correct, this is the type of situation where “they” will eventually put somebody who made a bundle in charge of a commission in order to figure out what happened and make sure it never happens again. But eventually happen, it will, in a way, very correlated.