COVID-19 UPDATE. NY hospitalizations soon to turn "net negative" = Good. Despite 3 waves of crisis coming, S&P 500 >2,800 confirms bottom is in (we realize this makes no sense)

COVID-19 remains a global crisis and we realize that many people need to keep up with COVID-19 developments, particularly since we are moving into the more critical stage ("restart economy"), so feel free to share our commentary to anyone who has interest. Taking a step back, it is clear that in the past week (few weeks), the US progress against COVID-19 is outperforming expectations.  This is evidenced by the case data (which we discuss below) but it is also evident in the powerful recovery of risky assets, both equity and credit (investment-grade and high-yield).  In fact, the S&P 500 closed above a key milestone (2,793, specifically, which is a 50% retrace) and since 1929, a bear market recovering 50% of losses historically signals the bottom is in (we realize some of you may protest that we don't know if this is the low low, but see our comments later, we explain this). You might think that this recovery in stocks is mere "noise" or a "deadcat bounce" and that we will soon resume a deadly decline.  But think of it this way.  After February 19th, the equity markets felt into a slide and by the time the first US non-Wuhan/non-cruise case was reported in early March, the S&P 500 was already down 15%. And by end of the first full week of Ma...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

More from the author

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Want to receive Regular Market Updates to your Inbox?

I am your default error :)