Your Weekly Market Blip 3/27/20

Your Weekly Market Blip 3/27/20

After three days of green bliss the Dow closed off 915 at 21,636 in a “buy the rumor sell the fact” type of move. Trading volume was lower for the day. The $2 trillion stimulus bill passed the House via voice vote and was sent to the White House for President Trump’s signature. A trillion here, a trillion there…..pretty soon we’re talking some real money! IBD still shows markets in correction mode and BTS remains in cash. For the week the Dow was up about 13%.
Real estate related stocks that own office buildings, data centers, storage units, strip malls, retail, timber etc were mostly higher today and at this stage are outperforming the general market. One possible reason behind the buying might be that these companies are viewed as an inflation hedge. In local news, Digital Realty just acquired a 49% interest in the Seattle Westin Exchange building which is across the street from Amazon and serves as a primary interconnection hub for Seattle.
So what are market gurus predicting at this point. There are three basic scenarios out there. One is that we will see a “V” shaped recovery which is a best case scenario. Another is a longer “U” shaped recovery and the third is a “W” shaped recovery which means investors rush back into stocks only to see markets roll over before putting in a final bottom. This is what happened in 1957/58 during the Asian flu outbreak and could be the one we need to pay most attention to. While we ultimately do not know which scenario will play out, investment managers are looking at two things to give them clarity and possible forward guidance and these are the passage of the stimulus bill which happened today and could be the left side of the “W” and the other is the inflection point at which we reach “peak virus” which might be weeks away and could represent the right side of the “W”.
Troop 100 held an online scout meeting last night and greenbar meetings are being held online as well. The troop continues to plan for summer camp in July and hikes this summer but as per the scout motto we must be prepared. Maybe we will host a toilet paper drive!

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