(Market Madness-May 13th Edition) The Second Dip Indicates We Have a Long Way To Go…
As Trump gets bombarded with criticisms by every ever-so left lenient journalist in America, the rest of the country is getting ready to open the economy little by little.
After a surprisingly stable Q1 report, the stock market rose up to almost it’s level pre-Corona. Even though the market has been quite volatile for the past 8 weeks, it rose up confidently for the past 6 days.
An incomprehensible bull move
It is curious to see the market rise at the same speed as the unemployment levels, unfortunately, keep rising. As we approach the 15% unemployment rate previously forecasted, We are now becoming well aware that it seems that a 25% unemployment rate is a more accurate forecast.
The rise in the market might have just been a little enthusiasm move by the bulls in hopes of a quick bounce-back from the economic halt.
After an alarming press conference from the Lead member of Trump Administration COVID Task Force Anthony Fauci, not only the U.S, but the world population is coming to a conclusion that the bounce-back looks more like a slow process.
No terrasse season for 2020
Yesterday and today, both the NASDAQ & the S&P 500 took a heavy downturn eradicating about a third of the territory it had gained.
Fed Chairman Jerome Powell mentioned today (May 13th) that he is concerned about the outcome of the economy. He insists that even though the government is doing the best they can to reopen the economy, it is still a risky move due to the uncertainty surrounding the virus and the possible cure for it.
Opening the Economy is the best outcome regardless
Even if it’s an unpopular opinion, the most logical thing to do is to progressively open up businesses that provide economic movement. This isn't (or in theory shouldn’t be ) shocking for people to expect government policies to start taking measures to get the ball rolling.
The economic state we are currently living in resembles more and more to the notorious 1929 recession.
Although I am not profoundly knowledgable about the subject, I am doing to do my best to explain the similarities between these two time periods in a later blog.
My opinion on the market
As a complete beginner & inexperienced investor, I HIGHLY suggest you take this counsel with a grain of salt. I am not qualified (yet) to give financial advice.
I believe we are going to see another overall bear day tomorrow & it might continue for the rest of the week.
We’ll see what happens with the news tomorrow.
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