Rush we both know China is full of lies. Trump has his work cut out for him on phase 2. That's going to require 4 years imo including phase 3. It will not happen fast.
Plus, who knows how many million lies they are telling about the Coronavirus.
So, is the market finally getting serious w this Corona virus ? S&p futures down about 450 points at time of this writing. Both Italy and South Korea have had an escalation in cases over the weekend. Who is next ? That's the biggest concern. The international community really doesn't have a handle on this, and the WHO is an absolute joke, showering China w praise in their initial handling of the virus. Hell, China's mismanagement and lying of cases is clearly attributable to the pandemic we have today.
This got virtually no media attention, but two WSJ press correspondents had their press credentials revoked by China. This, for WSJ opinion columnists going on the attack on China, essentially calling China "the sick man " of Asia. Why is this important you ask? Well, free speech is an essential part of reporting, and China is stamping this out.
I see WSJ is not giving in. Just read another critical piece on China. Secretary of State Pompeo defended the WSJ, and had some attacking words for China.
Trump has been eerily quiet on any criticism of China. It is a smart move, for he does not want to sabotage China Trade Deal until AFTER the election. The gloves come off then IMHO. China will certainly renege on their commitments, and tariffs part deux take effect.
Rush....we survived 2009 and it's 50% crash. This will be a blip on the radar assuming this Corona virus isn't the pandemic that wipes out global populations. On a side note, maybe the people of China should reconsider eating rats, bats, snakes and whatever other crap they are consuming. It is a crime against humanity to impose Communism on the people of a country to the point that they are so suppressed that they have to eat snakes and bats to survive.
Did you know here in the USA the average is 92 residents per square mile? In Beijing, the capita per square mile is 14,000 people. One or two of those 14,000 people eat an infected bat and you have a crisis.
With China lifting the ban on the single child limit a few years ago, I get the feeling that China will be the epicenter of the hopefully way into the future pandemic that movies are made about.
Gamble, do you have your shopping list ready on stocks you'd like to buy ? .. markets (and health experts) are suspecting this virus is gonna come here to U.S. in much larger numbers , and markets are selling off yet again.
PENN is down more than 10% in two trading days. If you regretted missing the opportunity before , you have a better entry point now.
I wish I had a pile of cash right now but I just unloaded most of my cash on a new Lincoln SUV last month. So no shopping list for me...just holding tight. Certainly not selling at this point. Holding on for the ride is what I do best. I don't let corrections stress me out. Next month the dividends will pay the same as they always do every 90 days.
As far as the virus, a vaccine will be available for trials as soon as April. The nations of this world have the most brilliant scientists working on a vaccine 24 hours a day.
I am hoping for an effective vaccine by the springtime parlayed with a Trump victory in the fall. That will be a big boost to the markets when it happens. We must have faith in the scientists working on the vaccine and for the American people to vote against socialism.
These blow-off corrections are always shocking to witness when the markets start tanking hard. This too shall pass.
Nice, Gamble ... Fear and Panic have certainly taken hold in the market this week. Dow went down another 1,200 points today. It is good to at least do SOME buying today. Not calling the bottom, but buying at -10%+ correction levels is a good idea for long term investors.
On a side note, PENN has done a complete round trip and is down almost 5% from my entry point . lol. I have patience..
I find it comical when the talking heads on the financial networks are trying to model the impact to earnings for companies. Are you kidding me ? No company in their right mind, particularly those that have production lines in China , has any idea how big the impact will be to earnings. As you said well before, this too shall pass. People just need to be patient and take advantage of opportunities. I forget where I heard it , but stocks are the only thing people run away from when there is a sale.
Today was an absolutely brutal close and is a really bad set up for Friday trading with the VIX at 34. I can't imagine traders will be buying stocks going into the weekend with the implied volatility and virus uncertainty. The media, of course, is doing their best to sell papers and subscriptions by pumping up the fear mongering. The situation going on in Sacramento, California is like pouring gasoline on a forest fire and gives the media more ammo to pump out more dirty laundry.
In the history of the stock markets, they have never corrected more than 10% in 4 trading days until today. Expect more of the same tomorrow but certainly a relief rally next week regardless of the virus news. Just my 2 cents.
Yes, I think you're right. The situation in Northern Ca certainly has the potential to get out of control here in U.S. As you point out, few traders may not want to stick around to find out what transpires over the weekend, and sell on Friday.
Not surprisingly, Friday is shaping up to be another whipsaw kind of day. Overnight futures have already oscillated between-100 and -400 points
Next week we "should" see how a VIX at 47 can work on the upside. I have never seen the VIX go from 33 to 48 overnight and it was just 21 on Monday. The fact that we have made the fastest official correction (3.5 days this week) in the history of the markets should indicate that fear is peaking.
The good news is that this is not a permanent situation. All you have to do is take a look at the 50 year charts to know that.
You can already see some capitulation taking hold today.. I have a dashboard of 40 or so stocks I look at on a daily basis. Carnival Cruise Lines and my gambling stock (PENN) or up on the day. Those have been viciously hit this week.
Also, Chevron is down 2%, while Exxon is up 2%. Absent any company specific news, on what planet does that make any sense at all. Today has an element of the Wild, Wild , West to it.
This VIX move is nothing guys...seriously. People have been ATM-ing short VIX for like ten years and it has done a RS at least once. This mild unwind is zippo nada compared to the carnage the shorts did on it.
People forget the flip side and when the VIX crushed many...how people think a one side trade works forever is beyond me.
Did anybody just catch that ? In today's briefing, Trump referred to the virus as the "China Virus." I know you guys are aware of the disinformation campaign that China has well underway, already trying to deflect responsibility of the virus. China propaganda is in overdrive..
There will (hopefully) come a time in the future that we can address China and its issues. I hope that starts with an outright ban of production in China on "essential product." (i.e. medical supply chain and production, pharmaceutical supply chain and production, defense supply chain, etc.) Over the longer term, this country needs to start moving away from Chinese production as much as it can. If we can do that, it will make these tariffs look like child's play, and China can (hopefully) suffer economically..
Today I learned that just 6 days before the signing of the Phase 1 deal, China added several provisions in the deal which were granted by Trump and didn't seem worth mentioning at the time. Can you guess what one of the provisions was?
It seems China added out clauses to their commitments to the USA in the final deal. "Acts of God" and "World Pandemic" were added to the final deal, specifically absolving China of USA import promises if either were to occur.
Is it a coincidence that China delayed the deal for MONTHS, then just ONE WEEK after the signing of the bill they announce to the world the first news of the virus? The timing of all of this stinks to high heaven and proves that China can not be a faithful negotiator. Clearly China delayed the Phase 1 deal because they were trying to come to grips with what was making so many of their people ill and never told the USA or other countries.
The question I ask is this? Can the world hold China accountable for this criminal act. What can be done? Can the entire world boycott China?
Gamble, that is very interesting to hear. Out of curiosity, where did you hear this from? I'd be interested in reading the whole article.
You know I feel about China ; Bunch of lying liars... What we are already starting to learn is that the Chinese virus was started in a lab (not by malicious means, but studying), and the virus unintentionally. Let's take that at face value and assume it wasn't malicious. What became malicious and irresponsible was their hiding of information, including not telling us who "Patient 0" was, and silencing those in China (medical professionals, journalists) that tried to warn others about the virus's existence. THEN, to top it all off, China worked to contain the virus in their own country, but did nothing to prevent its spread around the rest of the world. That is a BIG PROBLEM that no one will forget !! If Trump does get re-elected, I wouldn't be surprised to see some of the things I posted in March actually happening... the shifting of production back to America , or other Asian countries. You asked "what can be done" . That would be my answer. Try to hurt them economically. And I don't know about the rest of the world. They don't seem to be on board with Trump just yet, if their response to the WHO debacle is any clue. To me , they (Europe) are weak and don't have any appetite to go against China .
..... On the topic of production in China, companies like Apple better start a contingency plan and re-designing their iPhones IMHO... like now !! Their current design takes advantage of cheap labor and "millions" of Chinese migrants working at FoxConn... (the big contract manufacturer that does most of Apple's production). If Chinese production were ever to go bye bye, Apple is gonna have a hell of a problem finding that many workers in other Asian countries to absorb China's production capabilities. (The WSJ had an article a few months ago that talked about just how many Chinese people work in factories.... Just for Apple.. it was astounding).
The long-term solution to Apple's production problem ? (and others too by the way) Robotics. (I even heard Mark Cuban refer to it a couple of weeks ago). Bring jobs back to America, albeit higher-skilled blue collar jobs that could maintain them. This is why I say Apple will probably need to re-design their iphones, eventually taking advantage of robotics, instead of millions of hands and fingers doing the current low-skilled assembly of the phones..
So you two are just eliminating the reality that corporate profits and greed are what drives trade with China? Even if they were the root cause of the virus it will not equate to much of any economic hit because they know our large, medium and small corps need their cheap inputs and products to make money.
The real group who suffer from any closed borders approach is the littlest player, the one who buy the goods and services that China discounts with their subsidized goods...so unless the lowest of the low wants to pay a MUCH larger cost for their day to day purchases China will come out of this just fine.
They ARE the root cause of the virus. The only real question is what was the exact source.. And I am well aware of the cost involved in this BIG change in behavior . Our society has benefited tremendously from the low cost of goods coming from China, but cost alone is not a reason to keep a relationship w/ the devil IMHO. Our consumer benefits from the relationship, our companies benefit from the relationship, our workers get hurt, however. And let's not forget, China is not the only game in town. There are many other Asian countries that can pick up their slack, and perhaps we can get a country like India start learning about manufacturing. That would be nice. Things MUST change, though. But by how much is debatable. I heard Pompeo speak today on a radio program about the need bring back critical needs manufacturing back to the U.S. I mentioned this almost exactly a month ago in this thread.
It would be nice to take this a step further and start "boycotting" other goods as well. They MUST be punished for their irresponsible behavior that has cost 10's of thousands of lives (and counting), and hitting them economically is the right way to do it .
Five years ago China was killing us with their mass produced high pressure laminate wood flooring. They don't give a donkey's a$$ about anything they do to the people of the USA, or for that matter, their own people.
I agree with you Wall that when this is over it will be back to business as usual, but I believe that China inserting the clause about a "World Pandemic" 6 days before they sign the phase 1 agreement and then just a week later announce the Coronavirus to the world is a crime. They manipulated the world to fit their timeline while they celebrated their Chinese New Year festival during all of January. I saw a report that China estimated that 3 billion trips took place for the "festival" that lasted 23 days. It wasn't until January 30th that China and WHO declared a global health emergency.
There is a lot to look at here, as China would likely just ignore any fine or imposition that would be imposed upon them anyway. Because they do not play by our laws, the only way to hurt them is to boycott them.
It's an act of crime against the world. PERIOD.
The doctor that discovered the virus (Li Wenliang) was warning all the local hospitals and spreading the horrific news but was hushed up in early January by the Communist rulers of China. He was forced to sign a document saying his warnings were all lies and rumors. Conveniently, he died a week later, allegedly of the virus itself.
I guess I'm just saying I hate China.
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