Markets went haywire last week thanks (so the story goes) to some retail traders in a Reddit forum led by a man named Roaring Kitty. It was hard to pay attention to much of anything else in capital markets, but it was also a busy week for earnings. Industrial companies said that demand was “very, very, very strong” and there was an abundance of commentary on price pressures. Jerome Powell isn’t worried though. Game on!
Succinct Summary: The decline in economic activity has been huge and the recovery may take longer than expected. However, bulls are betting on massive stimulus in an environment that was already highly liquid prior to the Covid crisis. Consumers are itching to get back to normal and some hard hit industries are seeing stabilizing trends. But the economy is subject to the machinations of non-economic forces: governments and a poorly understood disease.
Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.