The DOW Is Having It's Own March Madness - Part 2
In California, there are close to 700 cases of COVID-19, just behind Washington and New York. As a result, nearly 40 million people, have been ordered to stay at home except for when it is absolutely necessary for them to leave "until further notice" to help slow the spread of the novel coronavirus. In New York, all workers in nonessential businesses across New York state are required to stay home. We are talking about 20% of America’s population ordered to stay home. California alone has an economy worth $3 trillion.
The billionaire, Bill Ackman who had a return of 58% in 2019 said America will end if we don’t shut down the entire country for 30 days. Yet, he has been aggressively buying stocks in Hilton, Restaurant Brands and Starbucks.
Value investor and billionaire Bill Miller, who has beat the Markets for 15 straight years during his days at Legg Mason and had a 199% return in 2029 said it’s a exceptional buying opportunity now and suggested to start dribbling money into the Markets. Bill, who is 70, has been investing for a very long time and said this I the fifth greatest buying opportunity in his life…right now.
"Bond King" Jeffrey Gundlach who was short the Markets, just covered the last of his three stock shorts this past week, but did say the odds of a 2020 US recession is at 90%. He’s not only in that opinion.
Bank of America warned investors on Thursday that a coronavirus-induced recession is no longer avoidable — it’s already here.
“We are officially declaring that the economy has fallen into a recession ... joining the rest of the world, and it is a deep plunge,” Bank of America U.S. economist Michelle Meyer wrote in a note. “Jobs will be lost, wealth will be destroyed and confidence depressed.”
Bank of America looked at the labor market as a way to understand the “magnitude of the economic shock.” The firm expects the unemployment rate to nearly double, with roughly 1 million jobs lost each month of the second quarter for a total of 3.5 million.
Goldman Sachs economist, Jan Hatzius said a slowdown in the economy is already underway and expects GDP to decline 24% in the second quarter of 2020. Morgan Stanley economists, Chetan Ahya believes the recession will not be as steep as in 2009, but will be worse than the 2001.
So how much more downside risk do you think the Markets have? To give you a hint, check out this chart.
The DOW is down 4000 points just this week. My target on the DOW remains 15000, with my first next target at 18000.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted via Steemleo