Is the coronavirus the pin that will end the 10 year-long Everything Bubble?
Quite possibly, cautions Sven Henrick, technical analyst and lead market strategist for Northman Trader.
For too many years now, the financial markets have been conditioned that “dips don’t last”. Confident that the Fed will always provide the liquidity needed to push assets higher, investors have come to believe that risk doesn’t matter.
Well, covid-19 is exactly the kind of unexpected exogenous shock that central banks are powerless against. No amount of intervention by the Fed, the ECB or the PBoC will slow the spread of the virus, or force-start factories idle from workers quarantines.
So, what to expect from here? In terms of damage to market prices, we haven’t seen anything yet, predicts Sven.
And today’s failed recovery is a sign that the previously-bulletproof market ‘exuberance’ of the past decade is now losing out to ‘fear’.
Combine further spread of the virus with continued de-celeration of global trade, then “all bets are off” warns Sven.
Click the play button below to listen to Chris’ interview with Sven Henrich (44m:45s)
Then, if concerned by the market risks Chris and Sven address, consider scheduling a free consultation & portfolio crash audit with Peak Prosperity’s endorsed financial advisor: