Are we Bull or Bear Right Now?

After taking a step back at the end of April the market began May strong with a 3.6% rise last week. There is a light at the end of the tunnel and while the markets currently see that light as sunshine, many others maintain it is an oncoming train.

The bull case argues that the majority of the record breaking unemployment we have seen over the past six weeks is concentrated in the hospitality and service industry (which are thought to be able to rehire quickly) and are furloughed workers that will return to work once we open back up. Further, the record breaking stimulus which in total represents more than double the entire annual expenditures mostly hits over the next six to nine months, helping prop us up until a vaccine or treatment can return life mostly back to normal.

The Bears say that this “opening back up” is likely to move very slowly, at best, and the service and hospitality industries will take a long time to bounce back. The government stimulus will wash through and not much will have changed and gravity will once again take hold of the market. A vaccine is still a long way out, at best, and we are stuck in the mud until then.

Time will tell which is correct. Early economic indicators are showing a bounce, but it is too early to call it a trend. We have tried to remain flexible, investing but not betting the farm at this point. We are watching very closely.

 scoop markets, written by professional economists and investors with backgrounds from leading Wall Street firms, breaks down the complexities of the stock market and economy into easy access, digestible morsels. You're busy, but you care about your investments - and it's exhausting keeping up with the stock market.  We solve that problem.  

If you don't like our newsletter, please unsubscribe at anytime. Seriously, no hard feelings.

SUBSCRIBE 

 Get the weekly email that makes keeping up with the market actually enjoyable. Stay informed, for free. 

© 2020 scoop markets. All Rights Reserved.