Is It Time To Buy??? - Part 10
This past Tuesday, New York Fed announced that it will increase lending in the repo market with a $50 billion injection and on Wednesday added a $25 billion injection. Then two days later, the Fed said it will ramp up its overnight funding by buying “repos” with $1.5 trillion. These actions were taken to ensure there was enough liquidity in the market so there would be enough short term money overnight for financial institutions to cover their operations throughout the day.
Then on Friday, U.S. jumped the most since 2008 after President Trump declared a national emergency and pledged to do whatever it takes to protect the economy from COVID-19. He also announced that over 1 million new tests for COVID-19 would be available next week and that 5 million would be available within the next month. The president also said that he would waive interest on federally held student loans and moved to prop up energy markets, by directing the Department of Energy to buy oil to fill the strategic petroleum reserve "right up to the top."
On the news, the S&P 500 surged close to 10%, most of it in the last half-hour of trading as Trump was talking.
So are we in the clear yet...not at all?
The virus has killed thousands of people worldwide, with over 135,000 confirmed cases and over 5,000 deaths. Public reaction has been mixed — many people have been rushing to grocery stores to stock up for a potential quarantine, while others have called the responses to be an overreaction.
In the U.S. there are over 1,600 confirmed cases, according to the Centers for Disease Control and Prevention (CDC), with 41 deaths. Makary said that the number of cases, though, is likely much higher.
“Don’t believe the numbers when you see, even on our Johns Hopkins website, that 1,600 Americans have the virus,” he said. “No, that means 1,600 got the test, tested positive. There are probably 25 to 50 people who have the virus for every one person who is confirmed.”
He added: “I think we have between 50,000 and half a million cases right now walking around in the United States.”
President Donald Trump has failed to take COVID-19 seriously when he had the opportunity to more things 4-6 weeks ago. Until today, he refused to take his own exposure to COVID-19 seriously and has refused to accept any responsibility for the slow rate of COVID-19 testing in the United States. And although over a 1 million test kits will go out this week, we will all see that the actual rate of infection in the United States is going to be a lot higher than anyone can imagine.
NOTE: COVID-19 could remain viable in the air "up to 3 hours post spraying disinfectant, while remaining alive on plastic and other surfaces for up to three days.
So is what we saw on Friday part of the relief rally, I have no idea, but me personally, I'm positioning for a longer term short once the rally moves up much further.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted via Steemleo
