Monday will be the big day and possibly the most watched day in terms of stock market movement because people are expecting things to get better once the stimulus package is announced and signed by both Congressional houses. The financial realites are that it will take months if not years to see if the money being released into the economy is having an affect on business and the people.
For people who are out of work and waiting for their unemployment checks, are debating whether to pay their medical insurance premium or the mortgage payment or their utility bill because they don’t have enough money, this coming Monday will be like any other day. A day where they need money and they need it now. The money that Congress is approving has to make it through to the people who need it so they can get employed and can pay their bills.
I still don’t expect anything other than a bounce because people now are being forced into savings mode. The problem is companies across the globe are expecting people to buy their goods and services. The companies that are waiting for clients or customers will be out of luck. Unless they have access to cash to tide them over a little longer, they will have to lay off more people and possibly shudder their doors. That will create a vicious cycle and somebody somewhere has to break it and start spending or hiring. Possibly do both.
Some pundits think that once the stock market starts to recover that in six months the US economy will begin it’s recovery. They are basing it on past recessions/Depressions but this time the problems are international and it may take a longer time till we bottom out. I think that we still are at least a ways away from a bottom. Maybe it is a year away. The flip side of the coin is that when I see everybody shorting stocks (myself included) it tells me that we are on the way to the end of a cycle. Whether it is a good cycle or a unicycle and I am just clowning around – only time will tell. If you decide to invest next week, keep your investments tight and set stop loss goals.
Good luck, stay healthy, get wealthy, become wiser and be happy!
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Kim Isaac Greenblatt
Monday Might Be Bounce Day If Stimulus Package Is Approved