Will Fed Put Prevent a Correction? The stock market has really lost its spark these last few weeks and once again we’re seeing indices coming back towards the recent lows. Growing unease around the success of the reopening process is no doubt fuelling much of this, with numerous regions being forced to backpedal on lifting restrictions, or at least pause the process. This is far from disastrous and in no way unexpected given the amount of second wave talk there’s been over the last couple of months. But while we’ve known a second wave is coming, we haven’t known how bad it’s going to be, how it’s going to be managed and how successful that is going to be. Perhaps this … [Read More...]

The trembling’s of the world’s stock markets turned into a rout overnight, with the major Wall Street indices all tumbling by between five and seven per cent. It is essential to understand why this happened to gain clarity about what the future may hold. One of the worst habits that the collective hive wisdom of the financial markets has, in this day and age, is fitting news headlines to the chosen short-term narrative. That habit was in full cry overnight, with global hand-wringing that secondary outbreaks of COVID-19 in the United States would send the world into an economic tailspin. That premise is entirely incorrect for one simple reason. The United States, through a combination of complacency and incompetence, had never got the initial … [Read More...]