As I write the market is rocketing lower on the back of the Fed’s .50 bp rate cut, yes you heard that right. It appears, for the moment anyway, that Mr. Market is well aware that cheap money isn’t going to fix a pandemic. What would have been smart was for the US to be prepared to at least test for the virus we have known about since December. The disparity of numbers of infected in China and South Korea is because they are testing a phenomenal amount of people. Time will tell how many deaths the stunningly amoral “ignore it and it will go away” attitude of our government will cause but it has already caused six near Seattle. If China and South Korea are any indication this gets much worse before it gets better. However, a ray of hope may be that we have seen far fewer cases in Hong Kong and Singapore which could possibly be due to higher temperatures there.
After dipping below 3050 the S&P seems to be holding just above for the moment, according to @DougKass an important technical level
To me technicals help in volatile times.
3050 was the 200 day moving average in S&P futures.
So we pushed thru and then pulled back and tested it this morning in premarket trading.
Thus far we have held it – which is constructive (thus far). $SPY @realmoney
— Douglas Kass (@DougKass) March 3, 2020
I have been adding to positions this morning and yesterday but not those that ran up (SHOP, BYND, TTD). Lots of dry powder remaining and I am viewing the rest of 2020 as a very tricky traders market based on a number of potential global outcomes. Know what you want to buy, pick your spot and have the confidence to average down as an investor.
P.S. Follow and listen to Doug Kass above and at realmoney.com, he is one of the very few I follow religiously!