As we approach the market open on Monday we face a future blighted by challenges, uncertainty and for the wiley opportunity. As increases in Covid-19 rise day by day with the peak still estimated to be months away there will be more swings than in a children’s playground of overbought and oversold at every corner as seen last week. With the DOW set to open again nearly 1000 points lower and various commodities recently plummeting after a shock interest rate cut and huge QE it looks like the plummet is just beginning.
As I look at things from a wider perspective many industries look like they’re set to falter under these conditions of quarantine and isolation with many seeking bailout from the government even at this early stage of the crisis. There are reports that the train and airline companies within the UK will be approaching the government for loans next week due to basically being banned from flying with a few Scandinavian airlines laying off thousands.
These will only be the first casualties with just this example what then happens to all the aircraft manufacturers who may have orders delayed and oil producers who now have less people to sell fuel to. The parts manufacturers who can’t sell to the aircraft manufacturers and truck drivers not delivering fuel, the hotels who no ones staying at to the cinemas no one can now afford to visit.
The ripples throughout the global economy will no doubt turn into a cascade. Not only these but other pressing issues such as the Russia Saudi oil spat, food shortages and various conflicts gathering pace once again this year will be one hell of a reckoning.
Seeing herd mentality and market psychology all working so fast and intensely is exciting, yet at these speeds quite scary and uncertain. You have to be one brave person to be entering these markets at the moment while fortunes are made but many lost.
Anyway, that’s enough said, got some trading to do some toilet paper to buy and a bank run to prepare for.