A big drop in today's share market, how low can it go?
Lowest so far: 4546 on 23 Mar 2020.
How Low Can ASX 200 Go?
chansc on 09/03/2020 - 11:09
Last edited 01/04/2020 - 11:36 by 1 other user
Last edited 01/04/2020 - 11:36 by 1 other user
Poll Options
- 55888 (today's lowest point so far)
- 85601 to 5888
- 215401 to 5600
- 65201 to 5400
- 145000 to 5200
- 3594801 to 5000
- 64601 to 4800
- 134401 to 4600
- 74201 to 4400
- 94001 to 4200
- 111Below 4000
- 5Below 3000
- 13Below 2000
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u reckon property price will collapse or just slowing down/modest price drop?
what does ur algo says about REIT market, e.g. VAP?interested to know more about ur automated trading and algo
thnx
I hedge based on economic data and price movements
No magic crystal ball :PDont touch REITS, financial stocks or utilities as data is not reliable (too much happens off the balance sheet)
Anyway my thoughts…
Can't see coronavirus going away any time soon
Demand falls in uncertain markets so less buyers
Less loans will be approved
Financially stressed default if they can't go to workBank share prices are a good proxy for our housing market imo
Maybe we get a QE nuke
Mortgage payments frozen
Money printing machines fired up"Dont touch REITS, financial stocks or utilities as data is not reliable (too much happens off the balance sheet)"
damn that's one huge blanket statement. but it's your own methodology and algo, i geddit.
@plentifoo: Should have read 'I dont touch'
i.e Reported EBITDA from a REIT or bank is not a very good metric for value
Most value based algos will exclude sectors or focus on long/short within one sector
It's under 4800, the popular votes now. It is under 4400 in fact. Maybe we should revote.
it will be going under 4k and that was my vote so not changing..
That option was originally just Below 5000, most people probably didn't return after they voted that since the poll options were changed.
Afterpay drop from $40 to $8 a share in about a month, is it still risky to buy?
yes when ppl aren't shopping / paying back
Less risk than at $40 when all red lights were flashing
Given that it's now trading over $17.50, I'm assuming you've doubled your money.
Lol. It seemed a good buy at that time. Missed out though. Afterpay is a high Risk portfolio. It is true what they say
High Risk = High return/loss
So the first of the market darlings(COH) announces capital raising to improve liquidity.
CSL the supreme darling drops 4% in an up market.
Wonder which of the big four will attempt a raising (my bet Westpac)
Great buying chances will arise but no yet by a long shot.
It's a bit ridiculous to suggest one of the big four will need to do a capital raising. They are mandated to have more cash on their balance sheets (liquidity) than any other sector. Cutting their (generous) dividends is much more likely.
Fair comment… time will tell whether ridiculous or not.
NAB had to pull a hybrid raising just a few weeks back half way through.(only around $1 billion they had to abandon)
CBA virtually gave shares away during the GFC.
12 month money raters have soared … even at the majors
yea I noticed that NAB raising. Was a bit weird that it wasn't very sizable?
@donamique: well was about the normal level for a hybrid raising.
as aside note US jobless raters just released 3.28 million. .. up from 220 000 odd the week before.. further carnage ahead
@IanC: ahh right. was the move because their client profile is made up of more small businesses than the other banks?
also when it does this hybrid raising don't current shareholders benefit from reduced debt of the company so there's not that much dilution overall?
@donamique: Just a raising to bolster their reserves.
When they do a raising in new ordinary shares unless the shareholder takes up the offer they are diluted as the div's are spread further@IanC: yea but the capital raised is meant to benefit the company (and therefore shareholders) more than if it didn't raise capital?
@donamique: Yes… providing company remains afloat.
Simple matter of risk and return as always especially with hybrids.
Merged from How are stock markets rising despite mass unemployment and the worst yet to come?
After the initial global stock market crashes, the stock markets have kept rising over the past few days despite mass unemployment in the developed world and the Chinese Coronavirus spreading like wildfire in Europe, the US (11,000 new cases) and everywhere else with no end in sight. How? I think it's reasonable to assert that the worst is yet to come. It smells fishy/batty. Thoughts?
Don't worry. It will be a roller coaster for several months I'm sure.
USD2T stimulus announcement caused a brief excitement in the market.
Chinese Coronavirus
You can just call it the Coronavirus.
Or covid-19 or human caronavirus
Chinese flu is fine
We live in a country which, for the most part, embraces free speech and I can call it anything I want, thanks. The virus originated in China and because of the duplicitous actions of the CCP by destroying evidence, lying to international governments and health organisations, imprisoning whistleblowers who attempted to warn the world, allowed the free movement of infected people via domestic and international travel despite the CCP knowing about the virus and its virulent contagious nature in December, is directly responsible for these worldwide deaths, global depression and mass human suffering.
Where did the Spanish Flu originate? But to answer your question in regards to the US, the markets have reacted positively for two reasons IMO. The stimulus package has created a little bit of certainty about the near-future and it's shown that the government will prop-up corporations and banks for the sake of the economy. Markets get spooked by uncertainty.
@kahn: There's debate about the origins of the Spanish flu but there's no question that this Chinese Coronavirus originated in Wuhan, China, probably from their morally repugnant wet markets. And there's no debate about the 2003 SARS outbreak originating from similar markets in China. Governments worldwide are focused on dealing with the aftermath of what China's unleashed on the rest of the world but in months to come when this has stabilised, I'm estimating and hope that there will be significant economic repercussions sanctioned against China.
The only thing we can be certain of at the moment, is uncertainty. These stimulus packages haven't done anything to mitigate mass unemployment, business insolvency etc. Unfortunately, I have a feeling that we're on the precipice of the worst to come.
@pegaxs: Tin foil hat?
- China tried to cover it up
- China arrested Doctors and made them sign statements saying they made false claims
- China destroyed evidence of the Doctor and hospital reports and told us it was a mild cold
- China allowed people to travel within China and Outside of China for 2 months with no action
- Find only agreed to allow the WHO into China in mid-Feb
- China STILL has not closed its international border - they never did
You don't think these 6 points are true?
- China has under reported its confirmed Covid-19 cases by one-third, or more than 40,000 infections
The Australian 25.03.2020
https://www.google.com/amp/s/amp.theaustralian.com.au/inquir…
- China has under reported its confirmed Covid-19 cases by one-third, or more than 40,000 infections
@pegaxs: It did originate from Wuhan, that's where an infectious disease lab is, they probably sold test animals to the market, as they've done before.
I accept your apology
Why can we not call it the Chinese Mass Killer Virus?
It originated in China.
It is a virus.
It is infecting a lot of people.
It is killing people.My title is factually correct and more specific than yours.
There are too many strains of the coronavirus some lethal some not.
But there is only one Chinese Mass Killer Virus to date.
China has under reported its confirmed Covid-19 cases by one-third, or more than 40,000 infections
The Australian 25.03.2020https://www.google.com/amp/s/amp.theaustralian.com.au/inquir…
It amazed me that there are no report of COVID-19 other than Wuhan in China. This virus infection was going on since Dec'19-Jan'20 and i'm sure thousands of people have traveled between Wuhan and other chinese cities like Shanghai and Beijing. But there is no reported cased of COVID in any other parts of China. This is confusing. Rest of the world, COVID is spreading in all most all cities but China..
I love your post 2 months ago :
https://www.ozbargain.com.au/node/520374#comment-8373805Because it's hype and not that serious. The last time I checked 2000 people have died from the virus that is a drop in the pool.
Did you know about 150,000 people die in the world everyday.
I think you have bought in to the media's hysteria.Their job is to make you worry and feel concerned. Turn your TV and internet off for a week and report back on how you feel.
You are deadset wrong.
It's the fault of the bat (ethnicity unknown)
Not sure if it was raw or cooked
@IanC: Maybe the bat ate a worm (probably raw) who had it.
Unfortunately ethnicity of the worm is unknown too, we can only blame it on the Chinese.
@donamique: Nup, you are Wrong too
It goes right back to where
the worm came from.Not sure if there were 2 on the Arc
Maybe the 2 birds ate them while Noah was on deck.
@IanC: Either way we can blame anything on the Chinese anyway. Or the immigrants. But first blame the Chinese so we feel much better about ourselves and find an outlet for our anger and pain.
@donamique: agree.
also we could go further back… perhaps the original apple tree was worm infested and then we know who to blame
You can just call it the Coronavirus.
You can just call it the Chinese covid-19.
https://www.ozbargain.com.au/node/514558?page=19#comment
Any further questions on the origin of COVID-19? NEWS 01 DECEMBER 2017
https://www.nature.com/articles/d41586-017-07766-9
…a team led by Shi Zheng-Li and Cui Jie of the Wuhan Institute of Virology in China sampled thousands of horseshoe bats in locations across the country…
at 1st you taught yourself to be patience in red , but now FOMO kicks in when all green
don't worry , you're not alone
should've gone in on afterpay when it was 8.90 but now 19.50
double your money in a few days
I wish I had your confidence and faith that our stock market won't collapse further, but I think this is wishful thinking. Think rationally about Afterpay's model - how do you think mass retail closures, mass unemployment and therefore unpayable debt will work out in the short and long term for this stock? The fact that it's going through a temporary and, in my opinion, short lived bull run isn't any real indication of future pricing.
not saying hodl , if i pump and dump i'm already mortgage free plus 100k surplus, all in a few days time
well such is life , my balls aint big enough
@dcep: Yeh but that share price is bucking logic. There's weird shit happening on the stock market at the moment but you'd be well advised to steer clear at the moment. Many wise economists have asserted that we're nowhere near the bottom yet.
@gyrex: TBH, I'm in same boat. Initially, i thought it's a bear market n it will be red for a few months before bottoming out. Last 3 days, i doubt myself even though i still believe more bad news are about to come out but emotion kinda kicked in :). Not trying to time bottom but in general do you think asx had bottom out or long way to go? Thanks.
@Bargain-er: Firstly, I'm neither an economist or financial advisor. I'm simply a retail investor who's made some prudent decisions over the years. In my opinion, we're at the precipice of a severe depression not seen in my lifetime - not even '87. In other words, I believe the stock market will crash further. These stimulus measures are synonymous with putting a band-aid on an amputated leg. We were already heading into a recession by the point this Chinese bat soup virus hit but this insipid virus has pushed the inevitable recession forward and amplified it to unprecedented levels in our lifetime. Overnight, the US has seen their cases balloon and we're seeing cases grow even further in Europe - unfortunately the worst is yet to come my friend.
@gyrex: I have no doubt that we re heading into recession locally and globally. My hope that it's not a depression like in 1929 which lasted for many many years (until WW2 over if not mistaken). Trump would reopen US by 12 April? :) while we re not even in lock down. Interesting time.
My blood has gone past the point of boiling and has evaporated - how has out government allowed this to happen underneath our noses? There will be a lot of questions asked about China's involvement in Australia after this crisis simmers down. Indeed, countries around the world will be asking similar questions.
Were you in favour of more government regulations before the pandemic?
Yes, especially in relation to foreign ownership of utilities and agricultural land etc. The FIRB and the successive LNP & Labor governments are culpable in allowing the disgraceful practice to occur. I'm pretty certain that this will all change after this crisis; and if it doesn't, then Australians are truly stupid for letting the government get away with it. We need to petition our local members for radical changes to foreign ownership laws and push media outlets to apply as much pressure as possible.
@kahn: LOL I don't watch FTA TV - I didn't realise she's still going :)That's not the kind of media which will get these sorts of changes done - I'm thinking talkback radio will be the appropriate medium. Voters on the centre left and right need to push for these changes in my opinion.
Let me play devil's advocate.
What if it was because of these medical supplies, and others from around the world back in Jan and Feb, that China was able to contained the spread of the virus just in around the Wuhan area. What if without these supplies, the virus affected other major cities like Beijing, Shanghai, etc like it did in Wuhan. China would have needed all the medical supplies they could produce for themselves. Where would Australia and other countries source their supplies once exiting stocks ran out.
China now have the virus pretty much under control, and have also increased their production capacities of medical supplies, they are now able to export new supplies to the world.
The world knew about this Virus over two months ago, and China by locking down most of the country during the Chinese New Year, pretty much shown the world what havoc this virus could cause. Why aren't our government be more prepared? Would it be because they think this is a "Chinese Virus" and won't affect us?
So that's what people mean when they said Chinese Virus…they thought the virus only affects you if you're Chinese…these people/Trump are not racist after all.
China now have the virus pretty much under control…
Probably the price paid was too high?
https://www.theepochtimes.com/the-closing-of-21-million-cell…
https://www.bloomberg.com/news/articles/2020-03-23/china-s-m…
This makes me jealous! https://www.9news.com.au/world/bill-ackman-hedge-fund-bet-co…
TLDR: Investment firm turns $27m into $2.6b by betting the crash. Has now cashed out and buying up cheap stocks.
NICE!
Is the bear market trying to wear off?
These daily gains we're seeing make no sense at all.
Exactly. Unemployment raising , business shutting down for couple of months, hell afterpay even jumped from $8 to $18 within few days.
It's like everything is totally fine and the pandemic just disappeared over the weekend, even though we're still in the middle of it all and it still remains impossible to properly quantify how badly affected each company will be over this period even with stimulus spending
How do people find confidence to hold onto shares in the current environment? Yes, the ASX200 is ~20%-30% off its highs. But when you look at what happened with Cochlear and Ooh!Media (owner of the APN outdoors advertising business), surely you have to consider that 1) there's been real intrinsic value destruction via dilutive equity issues (VERY dilutive in Ooh!'s case) and 2) Ooh! and Cochlear are far from the only ones in financial distress.
In Ooh!'s case, their share price was $5+ pre-crisis. Just the other day, they announced a 1 for 1 rights issue at 53c to pay down debt. They've effectively given half the company away: existing Ooh! shareholders only own half as much of the company as they did before the crisis.
Assuming there will be more Ooh!'s in the coming months, would there not be more value destruction on the way? I think Buffett said it best, when he said that the only way a smart person can go broke is because they used leverage. And there's plenty of leverage out there in the ASX, thanks to record low interest rates.
Just funds rebalancing their portfolios above the minimum threshold for equity holdings at quarter end?
Seems like a temporary phenomenon. Risks of dilutive cap raisings or asset fire sales remain.
Bottomed out so far at 4546 on 23rd Mar. (8 people got it right. Do we get cookies?)
Anyone think more pain to follow?
8 people got it right? A tad premature from my point of view. We're nowhere near the bottom.
Fair enough. Revisit this question in 12 months?
Why should it go down anymore? Cases are dropping in Australia. Quarantine will soon be removed (just follow Wuhan).
People will get back to work, they struggle but they still do work. Businesses will adapt and start to make profits. Economy will rebound.
America still like shit though
This crisis will continue for the next two years. Unemployment people won’t spend their money on new widgets. The retail market will tank when the $320b dries up.
(I don't know maybe just me?) Economy forecasts I've read and watched illustrated:
- unemployment
- cashflow of businesses
- Gov debts(to be paid in US$)
- recurring virus issues(mutation)
- exisiting zombie businesses
-…
Can cause more problems.Even with such negative factors, stock market can rebound if:
- keep oil price at a reasonable point
- no trade war between US and China
- gradually kill zombie businesses (without impacting healthy businesses)
- no economy crisis from Europe
- governments cash injections go to appropriate businesses (not to top quality businesses which do not need, but still greedy enough to take)
So I guess there are two paths in the future, and people make own bets with their brief.
People are going back to which work? In case you haven't noticed, thousands of businesses have, and will continue to, shut down permanently. Businesses will likely use this opportunity to trim staff in order to sure up their bottom line. Unemployment will continue to grow adding pressure on an already stressed property market with many mortgagees in mortgage stress due to poor LVR's. There's a myriad of other reasons which I haven't touched on but the short-medium term future looks very bleak from my point of view.
Because just prior to the Chinese bat soup flu pandemic, Australia's economy was already diving head first into recession. These stimulus packages are synonymous with putting a band-aid on an amputated leg. No one has a crystal ball but I'm predicting we're only at the beginning of a continuous, protracted economic decline.
@gyrex: Tens of drugs are in trial not to mention vaccines. If drug is out there that 'kills the virus in 48 hours' (in lab), that's the most effective drug in my opinion.
@[Deactivated]: It's all natural response. You have a contagious disease, therefore you stay home and close businesses. But if drug is found why would coronavirus affect economy more than many other diseases, malaria, mumps, measles,…
Having said that a cure is a prerequisite to economy boost…:)
@[Deactivated]: ScoMo has handled this beautifully. We are in a very good position (dramatically flattened curve) considering what is happening in other parts of the world. Be thankful for this.
Shares are raising, I am confused.
You have missed the boat my friend
That's what they were saying in the GFC during the first dead-cat bounce and then oops…
Still think so?
@[Deactivated]: Know so. Market is being propped up by speculators who actually have no real basis for added hope at the moment. IMF is going back 100 years to find equally devastatingly forecasts and it will just take some time for the slow pokes to catch on or lose their money. A lot of the price rises are being triggered by stupid short term things like a Trump comment but nothing is stopping this coming home to roost on all of us in the medium term and then it will be a slow climb back to where we once were and some industries and businesses will never recover. It's not the time to trade on day to day news anymore but a lot of people still are.
@rudiger1234: Wow very confident. But you are forgetting that this is man triggered lock down. They can choose not to.
Also that share prices is not value
@[Deactivated]: If they could open it, they would. As soon as anyone tries to open it opens the bag again. There is already irreparable damage done and money lost and the market is not reflecting that. Imagine a year from now. Near sighted people think the stimulus packages are going to buy us out of trouble but that is not the case. 6 months of this and our economy will shrink drastically. They are saying 6.3% lost from our economy, in comparison GFC was .1%. Anyone going in now will come out with a sore arse very soon. Just wait until there are real signs for optimism of things being open again. As yet, no such signs so damage continuing foreseeable future and compounding, the economy is nothing but a big house of cards, one industry shut down will shut down another and another and so on.
Market is reacting to the corona virus totals…..Devastating economic cost to the whole world is not being priced into markets..Markets are going way lower
I think it's because market performed better than forecast
It hasn't been long enough for reliable data to come in on the true effects this has had but blind Freddy can see this isn't good.
How low can it go how low how low
A mild?
Average bear market lasts approx 1 year (however might be quicker due to market spreading information faster)
Sell offs of 60-80% are not unheard of which puts XJO around 2500-3500
These are just arbitary numbers but its obvious that we are in a bear market (bias should be short for now)
The finally sell off usually coincides once earnings are hit (hasnt come yet)
We also have high level of mortgage stress so the housing market could collapse
High levels of debt and rates at zero mean not much room to borrow more (recent price increases are fueled by debt not meaningful growth)
Sentiment wise people I know are saying 'im not selling yet'
My parents asked if now was a good time to buy
All of these signal to me more selling is to come
The spanner in the works is the RBA and QE… they pumped the market friday and will probably intervene a few more times
All my trading is automated and my algos have said hedge for a while now.