Donald Trump is on the verge of signing a new act which would release $2 trillion in aid for the US as a means of combating the coronavirus threat. While this is a huge figure there are already serious concerns that it will not be anywhere near enough. As the US stock market looks to Donald Trump for a vote of confidence, what will investors make of the latest move by the president?
New York seriously concerned
The governor of New York has welcomed the bailout plans by the US government but suggested they are nowhere near enough for the state. As a direct consequence of the bill going through Congress, we will see $1.3 billion released to New York City. However, this would appear to be a drop in the ocean with an expected $15 billion revenue shortfall in the New York City budget alone. Continue reading “Is $2 trillion enough to combat US coronavirus threat?”
There is no doubt that Donald Trump is an intelligent man but the coronavirus could prove to be his political downfall. While few would criticise his initial optimism regarding the fight against the coronavirus, he does need to let reality speak. The criticism of the president is growing by the day and his strategy of literally digging in his heels is antagonising voters even more. So, what should Donald Trump do?
Let the experts speak Donald!
Those who follow Donald Trump’s tweets will be well aware that he has flip-flopped between non-action and over action with regards to the coronavirus. He has criticised experts, shot down his political opponents and to all intents and purposes moved himself into political isolation. Indeed there was speculation that he was becoming obsessed with plans to intentionally infect him with the coronavirus. This did not go down well with voters….. Continue reading “Time to let the experts speak Donald”
The Organisation for Economic Cooperation and Development (OECD) has warned that expected worldwide economic growth for 2020 could fall to as little as 1.5% from the previously forecast 2.4%. While this is seen as a worst-case scenario, it is now recognised that the coronavirus is the single largest threat to the worldwide economy since the financial collapse of 2008. Indeed, some experts believe that the reverberations as a consequence of the coronavirus could be more wide reaching.
Weak economies getting weaker
When you bear in mind that worldwide economic growth hit 2.9% 2019, what was seen as a weak year, 2020 could be even worse. While Chinese economic growth is expected to fall below 5%, compared to 6.1% in 2019, many people are already sceptical of these figures. Even this would be the weakest growth rate in China for nearly 30 years and cast a serious doubt on prospects for the worldwide economy. China and the Far East are extremely important to the worldwide economy and as we know the coronavirus has already had a huge impact in this area. Continue reading “Worldwide economic growth could half”
Over the last few days Donald Trump has seemingly been found wanting when it comes to the US government’s response to the coronavirus. Initially he dismissed it as effectively a non-event only to very quickly backtrack and announce a multibillion-dollar plan to protect the US. He has also been questioned regarding the appointment of various government officials who, in the eyes of many experts, have no relevant experience in tackling what is a unique challenge.
Markets look to governments for confidence
If you look back just a few weeks, the US stock market had fallen slightly but then there was a rebound amid suggestions that the coronavirus would not be as big a problem as had been first thought. In hindsight, this bullish and effectively incorrect stance would appear to have put back the US government’s response to the coronavirus some days/weeks. It also shows that markets do look to governments for confidence and direction especially in troubled times. Continue reading “Is the coronavirus exposing Donald Trump’s weaknesses?”
Stock markets around the world are in freefall amid serious concerns regarding the coronavirus and its impact on the worldwide economy. We have already seen an array of blue-chip companies warning about their short-term profits as a consequence of coronavirus related issues. Travel restrictions to a lack of component imports from the Far East are now starting to hit companies at the bottom line. So, what can the government do to assist and when will confidence return?
Markets dislike uncertainty
Those who follow the stock market will be fully aware that whatever definitive scenario, it is easy to value assets when taking into account the risk/reward ratio. The problem with the current situation is the uncertainty about how long the coronavirus will continue to spread and how this will impact the worldwide economy. There is also the double whammy of blue-chip companies announcing on a regular basis that they will see short-term problems due to coronavirus related issues such as supply/travel. Continue reading “The relentless fall in stock markets continues”
The stock market is basically an information exchange were all different views are entered and the markets find their own level as do individual share prices. So, when markets initially ignored the threat of the coronavirus many investors were relieved that the markets “knew something” nobody else did. Was the virus contained? Was the real threat over?
We have seen an array of different viruses over the last decade or so many of which have proved to be deadly. The so-called “disease X” often mentioned by the World Health Organisation (WHO) has yet to materialise even though we have had some near misses. So, could the coronavirus turn out to be the mysterious disease X the one that takes out a huge number of the population? Continue reading “Uncharted territory with coronavirus”
Just a few days ago the Tesla share price was surging towards $1000 a share as shorters scrambled to buy back stock with many registering huge losses. The shares have since settled down at around $750-$800 but today the company announced a $2 billion fundraising. The shares increased by around 5% on the back of this announcement although some are critical of the company’s management. Why?
Back in June 2019 the Tesla share price dipped under $200 and many were gambling that the company would go bust. Haemorrhaging cash, unable to sustain profitability and harbouring a chief executive who was never out of the news, it didn’t look good. However, it is not just shorters closing their positions which pushed the share price to approaching $1000. There has been a fundamental change in the way in which investors are viewing the company and the prospects for the future. Continue reading “Tesla to raise $2 billion”
Whether stock markets are flying high, bottomed out or remain constant, there are always opportunities for speculators. While stock markets can be overoptimistic they can also be overcautious which can create potentially lucrative buying opportunities. Investment forums and websites are littered with the names of successful investors who came from nothing to be multimillionaires.
While we always hear of the shares they made money from, what about the duds, the ones which cost them?
Gamblers never win
As with professional gamblers who use the services of bookmakers, there is only one winner, the bookie. The same is true with those who constantly speculate and gamble on the next success story. Yes, they may find four or five shares on the trot which do well, making them huge amounts of money. However, if they continue to take extreme risks then eventually they will be caught out. Continue reading “Why constant stock-market gambles never pay off”
There was a very interesting article this week regarding diversification against long-term investment. The idea was simple; does it make more sense to invest in the stock market on a long-term basis than trying to trade through the ups and downs?
Protection from stock market crashes
At some point you will hear all investors discuss stock-market crashes, often trying to predict when markets will peak and investors will bail out. The truth is that history shows stock-market crashes are not predictable and it can be one of a number of reasons which could prompt investors to flee. Over the last 50 years there have been three (arguably four) major stock-market crashes in the US. We saw markets suffer in 2007/8, the turn-of-the-century and in the early 70s (although some will point to the 1987 crash as well). So, if you are diversifying your portfolio to protect yourself against a stock market crash then three in 50 years is fairly rare? Continue reading “Invest your money and then walk away”
It is very rare that the Chinese government admits defeat and asks for outside assistance. Therefore, we can only assume that the published data on the coronavirus epidemic is understated and perhaps worse than many experts are suggesting. It now appears as though the virus can be spread between individuals before the carriers even shown signs of the infection. So where does this leave the worldwide economy?
Spreading around the world
At this moment in time the virus is predominantly situated in China but just recently we have had reports that the coronavirus has hit France, UK and the US. Economists are very wary of placing an economic figure on issues such as the coronavirus simply because there are a lot of unknown variables. Perhaps the best way to do it, this was recently reported in a BBC article, is to compare and contrast the coronavirus impact against SARS. Continue reading “What impact will the coronavirus have on the worldwide economy?”