General Markets Talk

Kram

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Sky now has a dedicated COVID-19 channel, must be getting towards peak fear.
At least 50 percent. Could be 90 percent.

couple of reasons.

1)the virus crisis hasnt really hit yet. Its still only 1000 people here. Its going to infect millions.

2) we havent had the financial crisis yet. its going to be impossible to avoid with businesses shutting down and losing cash flows. low quality corporate debt ratios were already terribly high before the virus even hit. Now take away these companies cash flow and defaults will start occuring. the banks and governments may take on that debt and it gives us time but then they will be the ones struggling instead.


this is the biggest economic disaster since the great depression. The GFC is going to small compared to this.

one thing could save us. A cure. thats the only thing that will stop this now.
When pretty much everyone starts talking like this and all the towels are thrown in is when it will bottom hehe.
 

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ash_1050

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Credit Suisse calling the bottom

Top investment analysts and fund managers say the Australian sharemarket could be approaching a bottom after a stomach-churning rout in March, but warn signs of progress on containing the coronavirus will be critical before investors regain confidence.

Last week was the worst for the local bourse since the global financial crisis. When it closed on Friday at 4816.6 points the benchmark S&P ASX200 index was down a whopping 33.1 per cent from its February high of 7197.2. The sharp reversal in just 21 trading sessions has wiped out four years of gains.

Damian Boey, the head of macro strategy and economics at Credit Suisse is now forecasting the local index to rise at an annualised pace of 6.6 per cent over the next five years.

"You can map it out in terms of valuation and you can map it out in terms of the events that need to happen before a bottom takes place. But on either approach, it does look like we're close to the bottom," Mr Boey told The Age and The Sydney Morning Herald.

"If you look at the valuation of Aussie equities, we estimate that the valuation has come off so much that over the next five years you should be expecting 6-7 per cent annualised returns on the index," he said.
The 33 per cent decline triggered by the coronavirus pandemic compares to a peak-to-trough fall of about 54 per cent for the ASX/200 between October 2007 and March 2009 during the global financial crisis. It took 12 years for the local market to fully regain the losses from the GFC.
AMP Capital chief economist Shane Oliver said while the Australian market was "getting nearer" to the bottom, but evidence of progress in containing the coronavirus will be critical for boosting confidence.
"We're seeing all the things we need for a bottom, shares are now very cheap, we’ve seen panic in the streets which is often what you see at market bottoms, and we've seen policy stimulus," he said.
"The only problem, the thing we haven't seen is confidence that coronavirus is coming under control - and that I think is the big problem here," he said.

"Because as long as the shutdown continues there's going to be a big hit to economic activity, and at the moment we don't have any confidence as to when that's going to end or how deep it will be. And until we get confidence on that front, it's premature to say we've actually hit bottom," he said.
 

Kram

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Sure it's anyone's guess exactly when but the thing is the market will eventually way overshoot to the downside and then rebound, and that it could be a quite violent upswing in its recovery? You don't want to grab the falling knife but it would also be a shame trying to pick out the bottom too closely and completely miss out on some real value.
 

Mazza1234678

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Sure it's anyone's guess exactly when but the thing is the market will eventually way overshoot to the downside and then rebound, and that it could be a quite violent upswing in its recovery? You don't want to grab the falling knife but it would also be a shame trying to pick out the bottom too closely and completely miss out on some real value.
Thing for me is, these businesses literally are gonna have no income for say 6 months or maybe more

I don’t think the market will go much more lower maybe down to about low 4s or high 3s (all ords) but I don’t see it rapidly going up in value once we come out of the other side

It’s glnna be slow, especially at the start
 

Mazza1234678

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Yep, long slow recovery you'd think. China is still in lockdown, four months in.
Yep so I’m not game to go in right now

Good chance every second or third person in Australia could be without work at some point over this 6 month lockdown

I think I’ll sit tight with my cash in the bank and wait for this to blow over, once I know my job is safe, economy is back to some form of normality I’ll defiently be having a Dip

You would have to have some serious balls or large amounts of net wealth to go in now given those lines I saw at centerlink on the news today. There are gonna be plenty more
 

Kram

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Thing for me is, these businesses literally are gonna have no income for say 6 months or maybe more

I don’t think the market will go much more lower maybe down to about low 4s or high 3s (all ords) but I don’t see it rapidly going up in value once we come out of the other side

It’s glnna be slow, especially at the start
The economy itself sure will be slow to recover, but I think the opinion was that the market will run up before that in anticipation of things getting back on track and it could be quick.
 

Deliverance

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There is talk that Asian economies could get up and running quickly because of their harsh lockdown. US is looking like a different story though. Talk of unemployment going beyond the GD levels. Would be years to recover if that's the case. Donnie would be in his knees to the Chinese then.
 

Mofra

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There is talk that Asian economies could get up and running quickly because of their harsh lockdown. US is looking like a different story though. Talk of unemployment going beyond the GD levels. Would be years to recover if that's the case. Donnie would be in his knees to the Chinese then.
Post GFC the US banks were sitting on billions worth of largely useless housing stock (jingle mail, not a factor here in Oz).
This time at least it's not the system that is at stake, it's a 12-18 month difficult period where a recovery is more likely. Consumer demand will return when the lockdown subsides.
 

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NonPhixion

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so can anyone explain to me why the Shanghai stock exchange has relatively held up during the last few months?
Albeit its down approximately 10% on January highs, but this seems like peanuts relative to the dow.
I'm a rookie here so go easy
 

Jimmy_the_Gent

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so can anyone explain to me why the Shanghai stock exchange has relatively held up during the last few months?
Albeit its down approximately 10% on January highs, but this seems like peanuts relative to the dow.
I'm a rookie here so go easy
I don't know how significant this is but one part of the explanation may be that Chinese shares were trading at much more realistic multiples before the shit hit the fan (PE Ratio, CAPE, that sort of thing).

I believe this was due to the trade war with the US.

Pretty much everywhere in the world stocks were exceedingly expensive and therefore had further to fall.
 

sabre_ac

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Putting aside the pain of seeing your portfolio get slaughtered it's actually fascinating watching this all unfold.
Agreed, add to that how the governments are reacting, it's all very short term focused (probably rightfully so), I'm not sure how this doesn't lead to greater government intervention and taxes in the long-term.

From a portfolio perspective, the people, in my opinion, most at risk as those 1-5 years from retirement, anyone longer has time to recover and I'd assume those in retirement have fairly conservative portfolios.
 

Seeds

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Thing for me is, these businesses literally are gonna have no income for say 6 months or maybe more

I don’t think the market will go much more lower maybe down to about low 4s or high 3s (all ords) but I don’t see it rapidly going up in value once we come out of the other side

It’s glnna be slow, especially at the start
Disagree. People dont want to miss out on tge rebound. Its already rising on speculation that italys infection rate has peaked. If the us one does watch the market boom. Couldeven get back close to pre crisis levels. however it will then gradually delate again as the market realises social distancing is here to stay for quite some time and some businesses go under.
 

burge13

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Is this a suckers rally/dead cat bounce etc or can it actually recover?

Theres surely no logic in 4 straight green days? Sheeps to the slaughter?
 

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