In the face of a pandemic that has brought the world to its knees, Chinese markets have been outperforming the rest of the world. It may seem strange that the source of COVID-19 is leading the way for 2020. It may seem especially inappropriate given the international backlash towards the country. It becomes egregious when you layer on the large debt pile and often misleading numbers coming from the Chinese government.
How does the stock market stack up in this recession compared to previous recessions, and what do forward price/earnings ratios (PE) and interest rates tell us?
How does the stock market stack up in this recession compared to previous recessions, and what do forward price/earnings ratios (PE) and interest rates tell us?
We believe there will be long-lasting economic and business ramifications long after the Covid-19 pandemic is resolved. Along the way governments will be on the hook for massive amounts of stimulus dollars to keep their economies running and in global financial markets, there will be companies and sectors that benefit and those who are adversely impacted by the deadly virus.
This past decade has been a tremendous run for the S&P 500, remarkably like the path of U.S. equities in the 1990’s. When looking at the other major asset classes, however, the 2010’s have not been nearly as exciting.
This past decade has been a tremendous run for the S&P 500, remarkably like the path of U.S. equities in the 1990’s. When looking at the other major asset classes, however, the 2010’s have not been nearly as exciting.
Last month, I discussed how there are many similarities to 2007, with volatility and bond prices moving together. Couple some economic data like housing permit growth, PE for stocks, a rally in gold, and household debt all looking like 2007 numbers with volatility and bonds looking like investors are getting ready to head for the hills in the stock market, and the backdrop looks like a recession was imminent.
Last month, I discussed how there are many similarities to 2007, with volatility and bond prices moving together. Couple some economic data like housing permit growth, PE for stocks, a rally in gold, and household debt all looking like 2007 numbers with volatility and bonds looking like investors are getting ready to head for the hills in the stock market, and the backdrop looks like a recession was imminent.
For months, investors have been scaling what feels like an endless wall of worry. Each concern that gets resolved seems to spawn new uncertainties, yet the market has continued its relentless climb higher.
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