Bear Market Rally or New Bull Market?

Jury is still out on whether this is a Bear Market Rally or New Bull Market. S&P 500 corrected by 35% and is now only down 15% from Feb 2020 peak. Tech Mega Caps are highly valued and value stocks and non tech economy stocks are beaten down. 

Time will tell as there is a disconnect between stock market and current economy and there are various outcomes possible in terms of COVID-19 Vaccine and Treatment availability timelines. 

CNBC: Bear Market Rally or New Bull Market?

Reliance Industries Jio Platforms Raises $10B at $60B Valuation

Reliance Industries Jio Platforms Raises $10B at $60B Valuation. Major Investors include FB, KKR and other US based Private Equity Investors. 

This is a bet on the Digitization of Indian Economy. 

Reliance Industries Jio Platforms Raises $10B at $60B Valuation

FB Invests $5.7B in Reliance Jio Platforms

Bear Market History - Correction and Length

Bear Market History - Correction and Length

S&P 500 Corrects 7.5% to 2740 - Values Abound for Long Term Investors

S&P 500 Corrects 7.5% to 2740 for a total correction of 19% from 3394. Admittedly this correction is from an elevated level and there is near term uncertainty due to COVID-19 impact on economy.  However for Long Term Investors Values Abound in the market including highest quality companies trading at attractive valuation, especially compared to 0.6% yield on US 10 Year Bond Rate. 

A snap back of US 10 Year Yield above 1% and containment of COVID-19 Virus are catalysts needed to signal the bottom on this correction. 

SPY 1 Year Chart

SPY 5 Year Chart

Blackstone in talks for $4B deal to take SOHO China private ($8.7B Enterprise Value Including $5.7B Debt)

Blackstone in talks for $4B deal to take SOHO China private ($8.7B Enterprise Value Including $5.7B Debt). BX will pay a 100% premium to depressed share price for this office developer. 

Blackstone in talks for $4B deal to take SOHO China private

Oil Set to Crash to $32 per Barrel as Russia and Saudi Arabia Declare War on US Shale

After OPEC and Russia failed to agree on Oil Cuts WTI and Brent are set to open $10 lower to $32. 

Oil Set to Open $10 Lower at $32

Oil Price 70 Year Chart

Updated Thoughts on Corona Virus Impact on Economy and Stock Market

Updated Thoughts on Corona Virus Impact on Economy and Stock Market

As the fear, psychology and change in customer behavior takes deeper hold due to Corona Virus affecting Travel, Leisure and other industries, I think Impact on Economy and Stock Market could be more than I initially anticipated. 

It is a fact that regular flu (Influenza Virus) will kill multiple times more people than Corona Virus, it also seems to be the case that human behavior to first one is ignorance but to the second one is fear. If this behavior of people cancelling vacations, business conferences, events at entertainment and sports venues continues there will be job losses in these sectors. The cutting of interest rates by US Fed to 0% is also stoking more fear in the market as long term bond yields fall with US 10 year at 0.8% and 30 year below 1.5% the stock market could tumble further down making new lows than Feb last week low of 2820 on S&P. 

Time to hold on to your assets and ride out the turbulence in the markets that could last a while. 

Contagion from fear will likely affects all sectors of the economy unless sentiment turns. Irony will be that it won’t be the Corona Virus that causes the recession but the human reaction and psychology to it that might.