Here’s the link:
With E.L Paso just announcing a two week lockdown of non-essential businesses due to a surge of Covid and the strains its causing on its healthcare system, I honestly believe that this is a precursor for the rest of the U.S as Covid infections continue to rise at an exponential rate with hospitalizations and deaths just lagging behind the curve by about a few weeks to a month.
What this means is that chances are, the US is in for a tough fall and winter and its most likely that this wave will be far more severe than the first wave because the first infections didn’t reach the US until well past the new year.
Now during the first lockdown, the FED put a backstop on virtually everything. They dropped interest rates to 0%, started infinite QE, and got lending facilities set up to cover virtually every part of the credit market whether its car loans or credit card debt. They actually got the market to believe that the FED is bailing them out on all fronts. Meanwhile, the federal government went trillions into debt subsidizing business expenses and giving everyone those stimmy checks to cover them over the summer.
Now, since those actions by the FED and the government have already been spent, its most likely the market already priced them in since March. With this new wave of lockdowns, what else can the FED really do to boost confidence in stocks when its already at all-time high? Can Powell really do infinity QE x 2?
Tl;dr: Get VIX
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.