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Wed Apr 29, 2020, 01:26 PM

DOW is up 610 points ? Why??

Does the DOW know covid-19 is going to get worse as the shutdown is dismantled?

26 replies, 1209 views

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Reply DOW is up 610 points ? Why?? (Original post)
at140 Apr 2020 OP
wryter2000 Apr 2020 #1
empedocles Apr 2020 #3
at140 Apr 2020 #7
wryter2000 Apr 2020 #11
at140 Apr 2020 #16
at140 Apr 2020 #6
wryter2000 Apr 2020 #12
pnwest Apr 2020 #2
Bernardo de La Paz Apr 2020 #4
lapfog_1 Apr 2020 #5
lark Apr 2020 #8
dlk Apr 2020 #9
Tech Apr 2020 #10
Frasier Balzov Apr 2020 #13
Shemp Howard Apr 2020 #14
at140 Apr 2020 #17
empedocles Apr 2020 #18
progree Apr 2020 #24
mn9driver Apr 2020 #15
Voltaire2 Apr 2020 #19
Warpy Apr 2020 #20
BillyBobBrilliant Apr 2020 #21
duforsure Apr 2020 #22
xyoungblood Apr 2020 #23
at140 Apr 2020 #25
progree Apr 2020 #26

Response to at140 (Original post)

Wed Apr 29, 2020, 01:28 PM

1. Cheap stocks?

If I had bunches of money, I'd be buying stock in good companies. I might have to hold onto them, but they'd come roaring back. The market will probably have a good rally when Joe Biden is elected.

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Response to wryter2000 (Reply #1)

Wed Apr 29, 2020, 01:31 PM

3. May be a long time before the real economy comes close to the January 2020 economy

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Response to empedocles (Reply #3)

Wed Apr 29, 2020, 01:36 PM

7. +100

Earliest point we COULD reach January 2020 economy will be in 2022.

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Response to at140 (Reply #7)

Wed Apr 29, 2020, 02:01 PM

11. Okay, I'm no expert, obviously

But that doesn't seem overly long to have to hold onto a stock.

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Response to wryter2000 (Reply #11)

Wed Apr 29, 2020, 02:29 PM

16. Usually market is looking forward about 6 months

not year or year and a half.

But covid-19 is so new and such an unknown, people are willing to gamble both ways.

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Response to wryter2000 (Reply #1)

Wed Apr 29, 2020, 01:34 PM

6. Stocks were 35% cheaper just a couple of months ago!

I did scrounge up some cash to buy a couple of months ago.
But now stocks are already too high.
The virus is not going to disappear.
2nd quarter corporate profits are going to be record low.

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Response to at140 (Reply #6)

Wed Apr 29, 2020, 02:02 PM

12. As I said, I'm no expert :)

But if they were cheaper months ago, why is the market lower?

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Response to at140 (Original post)

Wed Apr 29, 2020, 01:30 PM

2. Optimism about the news of good results

with that vaccine that could be ready as soon as September

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Response to at140 (Original post)

Wed Apr 29, 2020, 01:32 PM

4. Greed Over People. What's that spell?

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Response to at140 (Original post)

Wed Apr 29, 2020, 01:33 PM

5. Oxford vaccine early results (in primates, not people)

coupled with rendesivir large study showing promising results (30% drop in lenght of illness and 25% drop in mortality).

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Response to at140 (Original post)

Wed Apr 29, 2020, 01:45 PM

8. Owners will profit while workers die and they approve that message. n.t.

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Response to at140 (Original post)

Wed Apr 29, 2020, 01:48 PM

9. Emotion fuels the Dow, as much as anything else

Emotions are all over the map due to the COVID-19 pandemic. The Dow will likely be on a rollercoaster for awhile.

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Response to at140 (Original post)

Wed Apr 29, 2020, 01:49 PM

10. Most of them got money from the stimulus. So they have some slush funds to play with.

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Response to at140 (Original post)

Wed Apr 29, 2020, 02:06 PM

13. The one percent need to transition out to cash (and gold) in an orderly fashion.

A brief respite from the collapse will allow that to occur.

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Response to at140 (Original post)

Wed Apr 29, 2020, 02:10 PM

14. There is no where else to go.

Bank CDs are paying around 0.10%. A good money market fund might be paying around 0.50%. So if you want to invest for the future, youíve got to put your money into stocks. There is simply no where else to go.

But if bank CDs were paying around 6%, things would be very different in the stock market.

Thatís my amateur view, anyway.

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Response to Shemp Howard (Reply #14)

Wed Apr 29, 2020, 02:32 PM

17. Actually you are PROFOUNDLY correct.

The artificially low interest rates created by FED by printing Trillions of "electronic" money,
is the real reason stock markets and other hard assets such as housing are in a bubble.

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Response to Shemp Howard (Reply #14)

Wed Apr 29, 2020, 02:57 PM

18. From a different perspective than 'return on investment'. Popular Depression comedian

said he was not interested on a 'return on investment' . . . Will was interested in the 'return of HIS investment'.

[This may be a time to minimize losses, rather than risk, what could be a very risky bet on 'gains'].

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Response to Shemp Howard (Reply #14)

Wed Apr 29, 2020, 05:49 PM

24. What bank is paying just 0.10% on CD's? My credit union, which definitely doesn't

have the best rates, because it has brick and mortar branches, has rates of (APY)
91 day: 0.60%
1y: 1.10%
2y: 1.35%
4y: 1.65%
5y: 1.90%.

Also check out bankrate.com
2y: 1.75%
4y: 1.75%
5y: 1.80%

(I'm shocked that bankrate.com doesn't have much better rates than my credit union, it usually does).

Here's another showing 1y, 3y, and 5y for 10 banks in a table for easier comparison:

https://www.nerdwallet.com/best/banking/cd-rates

However, I entirely agree with your point that there's nowhere to go. These are miserable rates (the yield on the S&P 500 is better for example, and stock dividends rise over time rather than being fixed, and of course the endless historic record of stock capital gains). But I post this just because I don't want people to overlook FDIC- or NCUA-insured CD's for the part of their portfolio they feel should be in fixed income.

There are some who post about high P/E's and Shiller's CAPE ratio and Warren Buffett's market valuation / GDP ratio, both showing stocks considerably overvalued in aggregate compared to almost all of the past, but in my mind, leave out one crucial factor -- the one you mention -- rates on competing fixed income investments like bonds and CD's are about the lowest they've ever been. And just plain suck.

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Response to at140 (Original post)

Wed Apr 29, 2020, 02:11 PM

15. Vaccine and Remdesivir possible good news.

We will see the Market move up and down quite a bit as these things play out. Over the longer term, stocks will *probably* remain lower than their December-January highs due to ongoing economic bad news as a result of the long term disruption this has already caused.

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Response to at140 (Original post)

Wed Apr 29, 2020, 03:00 PM

19. giant corporations are doing quite well, eating up what remains of smaller companies

and there is a general consensus that the peasants should go back to work and just get used to dying more often.

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Response to at140 (Original post)

Wed Apr 29, 2020, 03:27 PM

20. Good news about how the bailouts will go to the "right people."

which leaves the 99% jobless, uninsured, and ill. The market loves that kind of news.

Reality is likely to set in soon as orders drop and the cash flow goes with them.

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Response to at140 (Original post)

Wed Apr 29, 2020, 03:37 PM

21. The misconception of a high valued stock market

being indicative of a good economy is bullshit being perpetrated by the capitalists.
The reality is, a high valued stock market is an indication of how much advantage the corporations are taking of the workers.
i.e. how much upward movement that the money supply makes from the average person to the wealthy.

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Response to at140 (Original post)

Wed Apr 29, 2020, 03:38 PM

22. Some people are pumping it up for trump

It's all fake, and it will crash on them anyway. They failed getting enough directly to the people in time, and this will take years to restore the economy from their failures.

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Response to at140 (Original post)

Wed Apr 29, 2020, 04:25 PM

23. The Federal Reserve (a private corporation) in charge of our money supply

 

is printing money and giving it to its banks to purchase securities (stock). It's their way of stopping the economy from siding all the way into a Depression and bankrupting them. They will probably have 6 TRILLION in the stock market by the end of the year. And remember they are a private corporation who controls the banks and our paper money supply.

They are also fighting to keep Trump in this election. He will use the inflated stock market as a prop for his false economy.

Now, no matter who gets elected president. The Federal Reserve will hold the global economy hostage because they own so much stock they can order government leaders to do their corporate bidding under threat of issuing a Sell Order on all of their stock, crushing our economy which will topple economies all over the world.

The head of Black Rock (a massive fund) said investing is dead. From now on just put your money wherever the Fed decides to invest. It's pointless to invest when the entire market is now manipulated and controlled by one corporation.

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Response to xyoungblood (Reply #23)

Wed Apr 29, 2020, 08:15 PM

25. Why the FED has so much power?

WTF our elected politicians not waking up and reform the crazy system?
If they wait longer, it is going to be too late.

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Response to xyoungblood (Reply #23)

Wed Apr 29, 2020, 08:25 PM

26. What stocks is the Fed buying? I haven't heard of this

I know they are buying a lot of bonds... including corporate bonds ... and yes, that boosts stocks by pushing interest rates down even more and providing liquidity for dubious quality bonds... but I haven't heard of the Fed buying up stocks. Yet.

Forbes, April 21
https://www.fool.com/investing/2020/04/21/why-is-the-stock-market-up-when-the-economy-is-tan.aspx
On April 9, the Federal Reserve pledged to buy up to $2.3 trillion in loans to enhance liquidity in the credit market, including junk bonds, which helped lift shares of struggling companies such as Ford, as well as retailers and restaurants.

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