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--- LQD, mostly corp. bonds = -2.43% todayWhere a bond fund you may hold has it's holdings will be reflected with some of the above returns. A possible exception now and going forward may be in the corp. bond area; as many companies have large bond debt, some of which is borderline "good junk" , particularly if company earnings falter in this environment.
"Getting worse but not 2008" currently passed for calm, thoughtful optimism.The moves are extreme but reflect the now-dual uncertainty of something that we have not seen since the Great Financial Crisis of 2008. Don’t expect this volatility to end anytime soon. COVID-19 cases are far from peaking in the U.S. The Fed is getting more limited in its market assistance options, and Washington D.C. is failing to inspire confidence. A “V” shaped bounce to all-time news highs will not be happening for the equity and risk asset markets this time around.
But this also does not look like a 2008 GFC panic which led to a collapse in real estate valuations and an 80-90% decline in bank stock prices. (Investor Letter, 3/9/2020)
In difficult market periods, [founder] Steve Leuthold liked to distinguish between conventionally oversold markets and those that had become “Jesus Christ oversold.” Recent action clearly qualifies as the latter. There are many ways to define a “dangerously” oversold condition, but the one that always raises our antenna is now flashing extreme selling pressure that might take longer than usual to mitigate.
Even after today's ... uhh, dip in the Dow, Rob Arnott head the same position:The S&P ended Monday at 2,746; 700 points above his "bargain" level.Currently, Research Affiliates models point to 10-year returns of just above zero for U.S. large-cap equities . . . The recent decline really hasn’t changed the outlook, Arnott said in an interview. “It might boost the 10-year expected return by 0.5% or 1%,” he said. “Since we’re expecting roughly zero net of inflation, this might boost it into the half a percent range.”
Arnott notes that European and U.S. equities have been hit harder than those in China, largely because developed-market valuations have been higher. “Do I look at it as a buying opportunity?” he said. “Yes. For U.S. stocks? No.” Arnott said that he wouldn’t regard stocks as being in bargain territory until they are a quarter to a third below current levels, or at about 2,058 on the S&P 500 or below.
Arnott continues to argue that EM and EM value stocks are exceedingly cheap. While the short term is really ugly there, he thinks of them as being powerfully positioned for 5-10 year returns.
David
I don’t short. Bill Fleckenstein does. As of last week he felt U.S. markets were still “too close to the top” (and prone to a rebound) to short much. He was biding his time waiting for something like today I think. Just my impression based on reading his blog (paid subscription) over the past couple years. So a lot of today’s carnage may be the result of short sellers jumping on the train. They can really push markets around depending whether they’re shorting or covering shorts.Bloodbath straight down....anyone shorting tomorrow?...
Any one buying or thinking buying next few days
Next few wks could be critical to whole 2nd quater/midyr
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