Dec 2018 vs Now..

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by RETAW57

I’m an Australian, and just wanted to hear your perspectives on the difference between now and December 2018. The December 2018 correction was well overdue, but reversed quickly and failed to even enter a bear market, since the Bull sentiment was too strong.

P/E for many companies are still sky high (and will be even higher once they start getting revised)

DJIA – 2018 – 21712.53 Now – 21052.53

Dow Jones is nearly at same level as 2018 December and that’s despite Boeing almost collapsing from it’s former heights and was happening even without coronavirus (sad to see one of my past favourite companies in this state, but c’est la vie)

S&P500 – 2018 – 2346.58 Now – 2488.65

S&P 500 is signficantly higher now than then despite the material damage and reduction in earnings and increase in debt of most constituent companies. XOM, CVX, AAL, CCL, RCL are the well knowns but even HON, 3M, DXC and most other constituents are expecting heavy losses or revisions.

NASDAQ – 2018 – 6190.17 Now – 7373.08

NASDAQ is signficantly higher despite many of it’s unicorns and stars like TESLA, UBER (which tbf didn’t exist in 2018). But let’s ignore that one, the tech bubble will keep going for a bit still.

NYSE – 2018 – 10724.19 Now – 9880.63

NYSE despite oil, airlines, retail, engineering, resources companies facing signficant losses/debt.

DAX – 2018 – 10279.20 Now – 9882.68 (at time of post)

DAX is barely down on it’s DEC 2018 low, despite Lufthansa being brought to it’s knees, Adidas with major sales and supply disruption, VW BMW and Daimler losing sales and money (for Daimler this is worse with F1) to name a few major impacts. Plus the already strained deutshce bank, post and reduction in business for siemens, eon, BASF.

CAC40 – 2018 – 4555.99 Now – 4284.94

CAC is headstrong despite many major REIT’s, hotels airlines, fashion brands which will have material impact and be only servicing a debt till maybe Q4 this year.

ASX200 – 2018 – 5410.20 Now – 5286.80

ASX200 is barely worse off despite China’s demand for resources materially impacted, Australian banks being asked to take the burden of the pandemic, REIT’s & travel agents just left servicing debt, one our two major airlines going bankrupt by June, Major Casino’s and retailers servicing debt for 6 months.

So if you read that, congrats, but if not, all good…. but my question is… at these prices… how is the material impact, job losses, etc priced in as many here say? And how are we already going to be rebounding, when the situation right now is way worse than Dec 2018, and yet we see similar pricing?

Sky High PE’s, Mounting Debt, Poorer leverage, Lack of expansions/project? Is this some weird Bear bubble?

Is some extra stimulus priced in after this is over? Because currently most stimulus is loans, which will still burden companies, heck, Australia has given practically nothing to businesses over 500 mil (which comprise most of our ASX), besides to one childcare provider.



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