The markets, unlike the news, are comprised of people who are betting actual money on outcomes. And people with actual “skin in the game” tend to be a lot more accurate than those who are paid seven-figure salaries to talk on camera.
Earnings forecasts vary depending on the analyst though all indicate significant declines are coming. It is important, if not difficult, to maintain perspective while, as a nation, we adjust the way we live our daily lives.
Before the market opened on Monday, the Federal Reserve announced that it would embark on an open-ended asset purchase program in an effort to provide “amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.” Ignoring the announcement, Monday’s market continued its decline. Many stock charts reached technical support levels justifying a short-term rally.
With Congressional haggling nearing consensus Tuesday, stocks rose on the hope that economic relief is at hand. Investors anxious for any sign of relief, pushed prices up again on Wednesday. Rallies happen in bear markets. Two good days does not constitute a new bull market.
The government emergency funding is insufficient to salvage the next round of corporate earnings reports. We expect any rally to be short lived. Our defensive strategies have protected clients from this bear market.
How much more do you want to lose?
Request a second opinion on your portfolio. Let’s compare notes. Help@IRIRadio.com or 800-317-9119.