History Tells Us Don't Trust This Stock Market Recovery, Crypto Coins News

History Tells Us Don't Trust This Stock Market Recovery, Crypto Coins News
  • The stock market’s recovery is little more than a dead cat bounce as more bad news is likely on the horizon.
  • Historical data say the market will see wild swings before finally returning to an upward trend.

  • Coronavirus cases in the US are nowhere near their peak, which will likely weigh on equities over the next few week.

On Tuesday, the Dow Jones Industrial Average posted its best daily gain since . Many began to wonder whether the U.S. stock market had finally bottomed. The index looked to be on track for a second day of gains on Wednesday.

Although the mood has indisputably lifted on Wall Street over the past 30 hours, this rally looks flimsy at best — profit-taking is likely around the corner.

Why Stocks Surged

Tuesday was a historic day. for the stock market as a multi-trillion dollar stimulus package was finally unveiled. The bill will inject much-needed funds into the U.S. economy in order to support Americans after their economy ground to a halt.

Donald Trump has been suggesting that lockdown measures will be lifted soon. | Source: Twitter

On top of that, President Trump said the coronavirus isn’t going to keep the US down for long. He hopes to have the country “open for business” by Apr. 24.

While most projections suggest the number of coronavirus cases in the US will probably be near all-time highs at that point, Trump says he doesn’t want to let the cure do more damage than the problem.

Why This Rally Can’t Continue

The US stock market’s rally is definitely worth cheering about, but before jumping in with both feet investors should consider the risks. The first of which is economic data about to hit the airwaves later this week.

Unemployment data will be in the spotlight on Thursday as jobless claims are seen surging to record highs. Goldman Sachs sees claims rising by 2. million , putting the figure at a historic high that surpasses levels seen during the and 2009 – (recessions.

Jobless claims are seen rising exponentially as businesses close their doors. | Source: Department of Labor

Unless economic data hold an upside surprise, traders can expect more volatility in the market in the days ahead. The economic consequences of coronavirus are still largely unknown, which will likely keep a lid on a prolonged stock market rally.

As CEO of Pepper International Carol Pepper says, this rally can’t be trusted as along as Covid – (cases are still on the rise:

We still need to see a slowing of the virus cases and a peaking in the US, because until then we’ll have these huge relief-rally days – then we’ll get a scary day and the market will plunge down again

Scary Days. are Coming for US Stocks

The scary days that Pepper is referring to are coming, especially as Donald Trump encourages the resumption of normal life sooner than anticipated.

Even if the U.S. carries on with its lockdown measures, the virus is likely to continue spreading at an alarming rate. That’s because travel in and out of New York, the worst affected state, has been largely unrestricted up until this point.

Coronavirus has hit New York the hardest but measures to contain it have been too little, too late. | Image: AP Photo / Mark Lennihan

New York is on par with Italy,

whose lockdown has been in place for several weeks now.

Travel in and out of Italy is severely restricted and has been over the past few weeks. People who traveled to Italy were told to self-isolate as early as February when the number of cases were less than half of where they are now.

In New York lock down measures have only just begun. On Tuesday, the White House asked people who’ve been in New York City to self-quarantine .

History Says Another Stock Market Crash is Coming

As hedge-fund manager David Tepper put it, “there’s nothing wrong with nibbling” at stocks right now as long as you understand the risks.

History Shows that the stock rally on Tuesday will probably be short-lived . Back in , the S&P (made its way) . 6% higher in just one day. The index saw another 19. 8% rise on Oct. 50. Five months later, the S&P (had lost another) % .

If that’s anything to go by, the next few weeks will be packed with dead-cat bounces and falling knives.

(The) market crash had plenty of ups and downs before finally bottoming. | Source: Yahoo Finance

As the economic impact of coronavirus becomes more clear, investors are likely to start panicking again. This time central bankers and government officials won’t have any tools left to ride to the rescue.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of and should not be considered investing or trading advice from This article was edited by Sam Bourgi

Now Watch: CCN TV

(Read More) Brave Browser

What do you think?

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

Piers Morgan hit with Ofcom complaints over 'screaming match' with Matt Hancock on coronavirus – Mirror Online,

Piers Morgan hit with Ofcom complaints over 'screaming match' with Matt Hancock on coronavirus – Mirror Online,

Zayn Malik Quit One Direction 5 Years Ago and Saved Music Forever, Crypto Coins News

Zayn Malik Quit One Direction 5 Years Ago and Saved Music Forever, Crypto Coins News