Updated: May 28, 2020
For the past few weeks, investors have been bombarded with bad news on the economy.
USA Total Coronavirus Cases: 34,717
China Total Coronavirus Cases: 81,093
UK Total Coronavirus Cases: 5,683
Italy Total Coronavirus Cases: 59,138
(Source: https://www.worldometers.info/coronavirus/#countries, from 23 Mar 2020)
This scary information has already incorporated into prices in the stock market. The market is where it is because of the bad news. Dow and FTSE have seen their biggest one day since 1987. Investors fear that the spread of the virus could destroy economic growth. Government intervention may add a burden to the economy while trying to contain the virus. The tourism industry, including airline, hotel and restaurants, has been severely damaged. Gold is a particular commodity until recently. Oil prices have slumped to its lowest price since June 2001. In response, central banks in many countries have cut interest rates.
Notice the major markets (https://en.wikipedia.org/wiki/List_of_stock_exchanges):
USA (New York Stock Exchange) (Nasdaq) located in New York City.
China (Shanghai Stock Exchange) (Hong Kong Stock Exchange) (Shenzhen Stock Exchange) located in Shanghai, Hong Kong and Shenzhen.
EU (Euronext) located in Amsterdam, Brussels, Dublin, Lisbon, Oslo, Paris.
UK (London Stock Exchange) located in London, Milan
SPX, NDX chart 3 months ago from 23 Mar 2020
New York Total Coronavirus Cases: 16,900 (23 Mar 2020)
SSE Index chart 3 months ago from 23 Mar 2020
N100 Index chart 3 months ago from 23 Mar 2020
Amsterdam, Brussels, Dublin, Lisbon, Oslo, Paris.
Netherlands Total Coronavirus Cases: 4,204
Belgium Total Coronavirus Cases: 3,401
Ireland Total Coronavirus Cases: 906
Portugal Total Coronavirus Cases: 1,600
Norway Total Coronavirus Cases: 2,385
France Total Coronavirus Cases: 16,018
FTSE 100 Index chart 3 months ago from 23 Mar 2020
Gold Prices Chart 6 Months ago from 23 Mar 2020
The big difference between the market and the economy is that the market is forward-looking, and it's unexpected events that primarily drive future stock prices. Thus, it doesn't even matter whether future news is good or bad. What matters is whether it's better or worse than already expected. Unless there is news surrounding the creation of a vaccine for Coronavirus, numbers of infected cases are controlled, and travel restricted are lifted to help the market bottom up. Otherwise, daily updated figures of the infected cases will create more fears and cause the market to decline further until it reaches normalization.
3 primary components in using Chinese metaphysics
Heaven: Season, Timing, Supernatural
Earth: Country, Region
People: Culture, Demographics
April, June, September is perceived high-risk months using metaphysics relationship with the year that may cause bear markets. Risk and expected return are positively correlated. The greater the perceived risk, the higher the expected return must be. But the lower prices that result also mean that expected returns are higher. Fear will continue to drive the market. Be patience; look for opportunities within your means and do not speculate.