The Trump Team Handled Coronavirus Chaos Magnificently, Market Responded With Record Bull Run

The Trump Team Handled Coronavirus Chaos Magnificently, Market Responded With Record Bull Run

#PresidentTrump #economy #Coronavirus #BullMarket

$DIA $SPY $QQQ $RUTX $VXX

President Trump and his economic team have handled and are handling the economy “magnificently” during the coronavirus chaos, and there is no doubt that a V-shaped recovery is happening

The S&P 500 closed at a record high Tuesday while rebounding from huge losses triggered by The Virus Chaos.

Everything that they could do right they did right, and they did not do anything wrong, The brilliance of The Trump Economic Team cannot be overestimated. There is no reason to change economic teams, period. There is still a lot of money waiting to be spent, and more if needed with No Pelosi Pork.

From professional money managers to market wizards, it has become silly to stay Bearish in the face of this record rally in stocks.

Fund managers who went to cash when the chaos broke out have been forced back in to stocks and driving them historical highs.

Wall Street’s Bearish gurus, some of whom surrendered 4 months ago, are now pushing up targets daily. Even Goldman Sachs Group Inc.(NYSE:GS), which warned that bad loans and falling dividends could drive a 2nd leg of the instant Bear market, now sees another 6% to the Northside in the S&P 500 this Summer.

FOMC gave birth to this rally and now is rampant after stocks staged a powerful rebound from the fastest Bear market ever.

Up more than 50% in less 6 months, the S&P 500 has made quickest recovery on record. The index rose to 3,395.06 Tuesday, surpassing its prior intraday record reached in February,

Money managers are embracing the equity rally after cutting their exposure to historically low marks during the waterfall, according to a survey by the National Association of Active Investment Managers. The group’s exposure index, tracking investment advisers from 200 firms overseeing more than $30-B, has risen to a 2-yr high. Even the most bearish respondents are 50% long equities, something not seen since late Y 2017.

Share prices reflect not just the expected future stream of earnings, but also the rate at which the profits are discounted to present value. A plunging risk-free interest rate partially explains why equities have performed so well despite downward revisions to expected earnings.

So much faith is put in the Fed that investors are willing to pay up for earnings that’s estimated to fall 20% this year. At 26X forecast profits, the S&P 500 traded at the most expensive level in 20 yrs.

The S&P record confirms that Wall Street’s most closely followed index entered a Bull market after hitting its chaos low on 23 March. It has risen 55% since then.

That makes the Bear market that started on 19 February the S&P 500’s shortest in its history.

Since the 23 March bottom, called in this column, the S&P posted the largest gainer in a 103-Day frame in 87 yrs, according to Refinitiv data.

Tuesday, the DJIA fell 66.84 pts, or 0.24%, to 27,778.07, the S&P 500 gained 7.79 pts, or 0.23%, to 3,389.78 and the NAS Comp added 81.12 pts, or 0.73%, at 11,210.84.

The NAS Comp marked its 18th record closing high since early June, when it confirmed its recovery from the virus sell-off. Tuesday’s record was its 34th record close so far this year compared with 31 record closing highs in Y 2019 and 29 in Y 2018.

Declining issues outnumbered advancing ones on the NYSE by a 1.40-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored decliners.

The S&P 500 posted 31 new 52-wk highs and no new lows; the NAS Comp recorded 70 new highs and 18 new lows.

Volume: Trade on the NYSE came in light at 770-M.shares exchanged.

HeffX-LTN’s overall technical out for the major US stock market indexes is Very Bullish in here, there is little to no overhead resistance in here 

  • NAS Comp +25.0% YTD
  • S&P 500 +5.0% YTD
  • DJIA -2.7% YTD
  • Russell 2000 -5.9% YTD

Looking Ahead: Investors will receive the FOMC Mins from the 28-29 July meeting and the weekly MBA Mortgage Applications Index Wednesday.

Have a healthy day, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.