Who else thinks the Sharemarket is going to tank much further?

Wow. US unemployment claims.

Ben Riley-Smith on Twitter

 

Are these numbers inflated due to the low unemployment starting point?

IE Before corona the US had 3.5% unemployment (lowest in 50 years), if the US was at 6.5% before corona there would already be 3% receiving benefits so potentially 3% not lining up now.

The number is huge, dont get me wrong, massive countrywide shutdowns do that. I just wonder how much the numbers are inflated due to the low starting point.

 

Hence ATO guidelines for SMSF don't concentrate all your income in 1 asset
some cash, some term deposit, some properties, some shares is probably a good mix

 

I agree that's a more realistic timeline for vaccines, even with fast-tracked TGA/FDA regulatory approval. Some of the antivirals being trialled however are already on the market for other indications and could conceivably be available for covid in a much shorter time frame.

My point was that, even with these best case scenarios, we can expect ongoing epidemiological interventions such as restricted travel and social distancing to continue to dampen the global economy.

 

US jobless claims soared to 6.6 M.

“The speed and scale of the job losses is without precedent. Until last month, the worst week for unemployment filings was 695,000 in 1982.”

 

It would but not everyone will. Everyone I know is tipping as much into super as they can. Not taking money out.

 

Someone was loling earlier at the stupid property investors for not understanding risk. But those savvy share investors who are now relying on dividends for income are going to be hit hard. Everyone is being hit.

 

Hey c'mon, I think dole bludgers are doing quite well. Doubled their money in 2 weeks!

*Joking, joking.

 

Sorry, I don't believe this, most ppl I know of paused their salary sacrifice.

 

It could be argued that the bottom has been found as massive US jobless records failed to negatively impact the market. Maybe it’s all priced in and a slow recovery with ebbs and flows is the likely next few months. In saying this, plenty of companies are going to go under over the next few months so a low risk appetite may suffice until maybe later in the year when one can start dabbling in more risk.

 

What you believe doesn't change the fact that everyone I know is putting extra into super right now.

 

Agree as we have different contacts, look like mine are all negative ;(

We are all holding cash to wait

 

I am still putting more in (before tax - a long way to preservation age) and also as after tax (closer to preservation age though) and holding cash as well to put more into super and outside

 

Not sure if you got burn last round but my friends did, they hold and wait as they can contribute extra before end of this FY

 

We are getting clients to up their DCA strategies using excess cash holdings and if drawing down pensions, utilising cash and rolling maturing TD's for next 12-24 months while leaving the money invested in markets. In 5 years time this will be looked back as an opportunity.

 

Yes, thats true. Going back to my original point though, do you know anyone taking money out of super? I know some people will but perhaps not enough to effect the market much more than it already is.

 

Lol I know people who were doing part time making $300-400 per week. Now they’re going to get a windfall of $800 per week lol

 

I have not seen any yet, probably many still have cash in offset. I think that withdrawal is only in Denial stage where nobody trust the stock market, which is not the case now. It is more like "I want to see the 2nd leg or more concrete good news before going back all in", and that is a good sight to me.

 

Everything LOOKS well capitalised at the moment doesnt it?

There is a limit to funding all this. RBA prints money and buys GOV bonds and funds all the payouts etc... (this will lead to massive currency devaluation once confidence in the Aus economy vanishes and crashes the AUD, it also means savings and super etc.. mainly cash will be worth crapshoot in the future.)

And even if businesses continue with zero interest loans, they still have to payout their workers and other overheads. These will cause them to run at a loss. The critical thing is TIMING.

That's why I am saying watch out for stage 2 credit crunch. Theres gonna be a lag period. Especially since a lot of our banks and economy are predicated on consumers and property prices, once these start to go down from job losses and deleveraging starts to gain momentum we shall see....

 

More unemployed than GFC period. I dont think thats inflated due to a previously low reference point. and thats just a start.