Updated April 2020
Stock buyback; The Real Force Behind This Bull Market?
Companies are on stock buyback buying binge
There has been no bigger cheerleader for large-cap U.S. stocks than large, American companies themselves.
Corporations are on pace to provide $480 billion in bids for S&P 500 stocks this year, according to an analysis by Goldman Sachs, providing more demand than any other source in 2019, including households, mutual funds or exchange-traded funds. Market Watch
Stock market Coronavirus Pandemic Update April 2020
It appears that markets are experiencing the “backbreaking correction” one which every bull market experiences at least once and is often mistaken for the end of the bull. While it feels like the end of the world, such corrections always end with a massive reversal. Given the current overreaction to the coronavirus, there is now a 70% probability that when the Dow bottoms and reverses course; it could tack on 2200 to 3600 points within ten days. Central bankers are already talking about another version of shock and awe to boost the markets as they did back in 2009. https://yhoo.it/2W4r9GV As we stated before the goal is to lower interest rates and debase the currency and hence one can expect many shock and awe programs.
Don’t forget to keep a trading journal; the best time to take notes is when blood is flowing freely on the streets. Interim Update March 9th, 2020
When the panic subsides, it will create a feeding frenzy of the likes we have never seen before. When you combine zero rates, two trillion dollar injection by the Feds and several more billion-dollar packages designed to stimulate the economy, the result is going to be a market melting upwards. The markets will be driven to heights that are unimaginable by today’s standards. Zero rates are also going to force a large portion of individuals on a fixed income to speculate, and these guys have a lot of cash sitting on the sidelines.
Other Articles of Interest:
Stock Trends & The Corona Virus Factor (March 14)
Trading The Markets & Investor Sentiment (March 3)