“It’s different this time.” It’s even worse.
This is Bill Blaine, a strategist at London-based Shard Capital, sharing his ominous view of the stock market on Thursday, before what he described as “the most critical election in world history” and as investors struggling with growing numbers of coronavirus.
“The winter closures, fears of a second and now a third wave of infections and the collapse of stocks amid prospects for a collapsing economic recovery across Europe have put markets in full swing,” he wrote in a blog post. “It may be the last few days of the month, but it looks like it could become a classic disaster in October.”
His bearish view is based largely on how ineffective he is, that he believes that all the money for free incentives will eventually be, once the “dark and dirty truths” of quantitative easing are finally realized. “You can fool markets with huge bailouts to cause a catastrophic catastrophe,” he said, “but no amount of QE can stop a small virus a billion times smaller than a pixel on a computer screen. [from] do your thing. ”
So what does an investor need to do to prepare for the next one?
“We will overcome this pandemic and that means that the main stocks are there!” He said. “But deepening the blockage and economic fabrication needed to fight the virus means there may be more market pain.” He urged investors to choose “your time to re-enter the markets … carefully” as he considered what be his personal approach from next Tuesday onwards.
“I am in the process of developing my post-US election strategy,” he continued. “And I honestly wonder if it’s worth the time and energy.”
Sell oil in case Biden wins and pushes out green energy? Short-lived stocks based on the threat of industry restraint? Change the exposure concerns about the future slope of the yield curve? Obviously there are a lot of moving parts. “Should I just acknowledge the attractiveness of further investment in the United States, it now seems … [q]unacceptable? “Blaine asked. Maybe I should invest elsewhere?”
He said stocks in Europe and the United Kingdom were cheap for some reason, and he wasn’t exactly tempted to add exposure there, so Blaine turned his attention elsewhere.
“This morning I will be filling out self-handling forms to redirect part of my portfolio for investment in Asia to Asia,” he explained in a note to Morning Porridge. “The western part of the world economy is strengthened by the pandemic, while Asia is back in action.”
Meanwhile, with only a few days left in October, there was no market crash on Thursday, with the Dow Jones Industrial Average DJIA
Nasdaq Composite COMP,
and S&P 500 SPX,
they all bounced back moderately after being hit hard for several days.