Where are we at in this downturn?

[Gregmal]

53 minutes ago, formthirteen said:

 

 

Chart crime, or am I supposed to see chart gremlins in this chart?

I don’t see a “wow” or a “gotcha” here but kind of a “duh”? Reminds me of when…eh certain folks here were posting Q2 GDP figures in 2020…don’t we already know this! Isn’t it obvious and self evident? 

[Metta]

2 hours ago, formthirteen said:

 

 

Chart crime, or am I supposed to see chart gremlins in this chart?

I see 15-day rolling period in the footnote.

[Spekulatius]

5 hours ago, Gregmal said:

I don’t see a “wow” or a “gotcha” here but kind of a “duh”? Reminds me of when…eh certain folks here were posting Q2 GDP figures in 2020…don’t we already know this! Isn’t it obvious and self evident? 

With the COVID-19 analogy, we are more at the January / February 2020 stage. The existence of virus was known, but it was in China only and no economic impact yet. Markets getting a little bit nervous…

 

I don’t know how this one plays out, but the market and economic risks are substantial, imo.

[nsx5200]

Apr 27, 2025

https://www.huffpost.com/entry/sex-workers-already-predicted-theres-a-recession-coming-heres-how-they-know-goog_l_680a6887e4b0b1be33560f56

"The past has shown that nontraditional measures like brothels, beer and lipstick can tell us a lot about the economy’s health."

 

The many nontraditional index listed in the article points to a incoming recession.

[Gregmal]

5 hours ago, Spekulatius said:

With the COVID-19 analogy, we are more at the January / February 2020 stage. The existence of virus was known, but it was in China only and no economic impact yet. Markets getting a little bit nervous…

 

I don’t know how this one plays out, but the market and economic risks are substantial, imo.

It’s not really a covid analogy as much as just using an example of people posting “duh” charts and extrapolating. Like obviously with 145% tariffs there’s going to be no trade with China. Same as obviously GDP will be awful if most of the country locks people in their houses. 

[brobro777]

Da low is in, indexes grind higher (with sometimes decently big ups and downs) rest of the year

 

SPX strongest, Russell weakest

 

 

[Gregmal]

Yea Russell is such a POS lol always my favorite hedge index 

[Xerxes]

9 hours ago, Spekulatius said:

With the COVID-19 analogy, we are more at the January / February 2020 stage. The existence of virus was known, but it was in China only and no economic impact yet. Markets getting a little bit nervous…

 

I don’t know how this one plays out, but the market and economic risks are substantial, imo.

back in March 2020, another analogy that was made was to compare it to Oct 2008 as the “crash” segment of the Covid downtown (that just happened) and the March 2009 “low VIX roll over” segment was yet to come ….
 

But it never came, and of course looking back we can reason it by the size of the fiscal and monetary intervention 

 

Going with analogies if anything I think we will have a situation like 2008-09 double segment rather than 2020 single segment V-recovery 

 

 

 

 

 

 

 

Edited April 29, 2025 by Xerxes

[Dinar]

Article on Bloomberg saying that the only trade that hedge funds have been comfortable with in April was shorting US stocks.  

[mattee2264]

Good point about COVID and the fiscal and monetary stimulus. I think another factor during COVID was the market quickly figured out that the market leaders i.e. Big Tech were massive beneficiaries as it accelerated adoption of e-commerce, cloud etc and handicapped their offline competitors. 

 

Hard to see who benefits from these tariffs. Even if tariffs force some import substitution US manufacturing has little presence in major stock market indices and there is so little certainty that I cannot see much switching let alone US manufacturers being motivated to invest to increase their capacity. 

 

Of course there might be some macro offsets such as lower oil prices and lower interest rates. And don't forget the US government is still running multi-trillion dollar deficits which will continue to support the economy.  There is also likely to be labour hoarding because a lot of companies laid off staff during COVID then later regretted it. And without a large rise in unemployment it is difficult for a full blown recession to arrive. And if progress in AI is encouraging enough investors may just look through to a few years down the line when they'll expect another golden goose for tech companies and across the board productivity improvements etc.

 

Also the tariffs are mostly a negotiating tactic argument is being partly vindicated. It is clear that tariffs are flexible and can be paused or increased or decreased at will. Trump also responds to pressure and has the ability to U-turn and come up with a rationalization for it. So we will probably land with none of the reciprocal tariff increases actually being imposed and most countries will get the 10% rate which still represents a significant increase but for the most part will just get absorbed/passed on to consumers. And there is always the possibility that Trump will be forced into a hard policy reversal either because the balance of power changes and his emergency powers get stripped from him or the US economy takes a dive and he gets convinced that the tariff policy isn't working. 

[Sweet]

16 hours ago, Dinar said:

Article on Bloomberg saying that the only trade that hedge funds have been comfortable with in April was shorting US stocks.  

 

What does that mean in practice.  That they took off their leverage and hedged with a short?  The idea that these guys just exited their positions and went short seems unlikely.

[Jaygo]

The earnings are starting to come in and they are sort of weak. Dont forget these should have been relatively strong to account for frontloading orders to avoid tariffs. So is it possible we had a slowing economy and then the tariffs were announced and now we are grinding to a halt?

 

I think the ball is in Trumps court and he will be getting pretty scared by the numbers. 

 

As for equities I am not sure how to play this. I think the economy is shit, I think it is getting shittier but i'm not sure how or long that will take to enter the markets. All I know is i'm avoiding US multinationals because the damage to brands is huge. 

 

I was young and dumb during the GFC so I cant really remember what the tone was as the time. For more seasoned investors? Does the market look past this and say were going to get deals or does the market front run the inevitable terrible summer numbers? 

 

 

 

 

[Dinar]

2 hours ago, Sweet said:

 

What does that mean in practice.  That they took off their leverage and hedged with a short?  The idea that these guys just exited their positions and went short seems unlikely.

Probably means that you are unlikely to see another 7-10% down day in the next several months, and if economic news/tariffs get resolved in the market friendly direction, the market will rip.  

[Sweet]

33 minutes ago, Dinar said:

Probably means that you are unlikely to see another 7-10% down day in the next several months, and if economic news/tariffs get resolved in the market friendly direction, the market will rip.  

Because hedge funds are short, or because of covering short position?

[Dinar]

30 minutes ago, Sweet said:

Because hedge funds are short, or because of covering short position?

My guess is that prior to early March, hedge funds were very, very long, probably on leverage as well, as optimism regarding deregulation, and expectation that tariffs were just a negotiating tactic made people optimistic.  Then it probably went the other way, as leverage was eliminated or drastically reduced.  You could see it in stock movements, as stocks like PM or KO would be up sharply on the day when the market would be down a lot.  Now, hedge funds are probably a lot less long than they normally are, and are looking for reasons to get back in.  (I do not think that hedge funds are net short, just a lot less long than they normally are.  Heck, Mark Mobius, not a hedge fund guy, is 95% in cash.)  

[Gregmal]

Any guesses how much the asshole at CNBC who is tasked with immediately updating the red BREAKING! alert every round number hundred of DOW points to say “stocks PLUMMET xxx points” in sensational fashion gets paid? 

[dwy000]

9 minutes ago, Gregmal said:

Any guesses how much the asshole at CNBC who is tasked with immediately updating the red BREAKING! alert every round number hundred of DOW points to say “stocks PLUMMET xxx points” in sensational fashion gets paid? 

Why is he an asshole?  

[Gregmal]

29 minutes ago, dwy000 said:

Why is he an asshole?  

Only because it’s probably some low level aspiring MSM snoot who hasn’t advanced in his career enough to become a full blown POS. 

[Ulti]

https://podcasts.apple.com/us/podcast/nouriel-roubini-talks-tariffs-dollar-and-global-relations/id1690236827?i=1000704954988
 

interesting take in that the US has 1st mover in the AI / tech space and production growth will continue to increase in spite of bad trade and migration policies 

[dwy000]

1 hour ago, Gregmal said:

Only because it’s probably some low level aspiring MSM snoot who hasn’t advanced in his career enough to become a full blown POS. 

Or it's just some person trying to do their job to the best of their ability.  To go straight to "asshole" seems unnecessary. 

[Eldad]

9 minutes ago, dwy000 said:

Or it's just some person trying to do their job to the best of their ability.  To go straight to "asshole" seems unnecessary. 

It’s just a joke. But to want to go into that line of work may imply a predisposition towards A-hole. This isn’t the Depression where we are all just happy to be working.  
 

Are all actors liars? Maybe not but they picked a career where they deceive and pretend to be someone else for a living. 

[RichardGibbons]

5 hours ago, Jaygo said:

I was young and dumb during the GFC so I cant really remember what the tone was as the time. For more seasoned investors? Does the market look past this and say were going to get deals or does the market front run the inevitable terrible summer numbers?

 

My memory is unreliable, but the thing from the GFC that really sticks with me is that before the major collapse, people on CoBF were basically saying, "All these numbers are horrible. How is the market still going up? It makes no sense!" And that mode didn't last for a couple weeks, but literally for months.

The market is supposed to be forward-looking, but I think in that particular instance, it only priced in the bad news well after it was obvious that the world was ending.  I think it was Bear Stearns that finally made the market actually react to the atrocious news.

[hardcorevalue]

This hardly seems as bad as the GFC and we already fell 20% at the peak drawdown. The US will fold very soon and both countries are exempting products. The US probably puts a ~10-20% tariff on most countries Why is everybody so concerned? Are you guys expecting a 50% drawdown or something. Just focus on individual companies that have great upside seems a better use than perma bear stuff.

[Eldad]

37 minutes ago, hardcorevalue said:

This hardly seems as bad as the GFC and we already fell 20% at the peak drawdown. The US will fold very soon and both countries are exempting products. The US probably puts a ~10-20% tariff on most countries Why is everybody so concerned? Are you guys expecting a 50% drawdown or something. Just focus on individual companies that have great upside seems a better use than perma bear stuff.

Yeah I think the market thinks there will be another extension on the ex-China countries for the ones that still have not made deals.
 

Just like with all things Trump, there will be so many loopholes, exemptions, and work arounds with China, it may not amount to much. 

 

Then the interest rate futures are forecasting a cut sometime before the end of July. Powell basically always cuts when the probabilities get this high. 

[brobro777]

Well I am disappointed Nasdaq futures didn't hit 20k this month. 19791? come on!