The global rally at risk of fizzling after Thursday’s historic ‘bull’ run

Happy Friday. Wow, what a week! We went from bear to bull country in a mere three days. Will the rally hold up for another day?

Let’s spin the globe and see where investors are putting their cash.

Markets update

As I type, Asia is mostly clinging to its gains. The major indices rallied early after yesterday’s historic day in the U.S. in which the Dow and S&P 500 both rocketed 6{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} higher.

Now, you’re no doubt wondering: are we officially in a bull market? The Dow is up more than 20{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} since Monday’s close. A 20{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} gain. That’s a bull market. Right?

Not so fast. A bull market is not as easily defined as a bear market (bear market definition = a 20{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} decline from a market high). Some say for it to be a true bull market, the rally has to be sustained for an extended period. Others say there’s “no numerical measure.” The Wall Street Journal is going straight out and calling it a bull market. CNBC, meanwhile, is being more careful with its wording, calling the run a mere “surge.” Bloomberg TV is splitting the difference, calling it a “technical bull market.”

If I know Bull Sheeters, you’ve already concluded we’re in a bull market. There have certainly been some bullish calls in the past 24 hours. BlackRock CEO Larry Fink told long-term investors, “I believe now is the time to start adding risk.”


Continuing our global tour of markets, Europe opened in the red today with the benchmark Euro STOXX 600 trading down 1.9{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} in the first half-hour of trade. Even with the slide, Germany’s DAX is up 12.6{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} since Monday’s close.


The Dow and S&P futures are both pointing downward 1.8{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} at the moment. They’ve pinged up and down all morning. The Nasdaq, meanwhile, looks set to open lower by 158 points, or 2{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3}.


Elsewhere, the dollar is flat. Amid this equities rally, the greenback is set for its worst week since 2009. Gold and Brent Crude are both edging down as well.


We have more numbers for you, as we do every Friday.


By the numbers

89. As in 89 years. You have to go back to 1931—the Herbert Hoover presidency—to match this week’s three-day gains on the Dow Jones Industrial Average. Blue chips are up a mammoth 21.3{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} since Monday’s close. The S&P 500 rally is nearly as impressive. It’s up 17.6{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} in the same period, its best run since 1933. These gains happened despite soaring coronavirus infection numbers in the United States and a rapidly deteriorating jobs picture.

3.28 million. Yesterday’s 3.28 million jobless claims were no surprise, but they were still eye-watering. Berenberg analysts put it into perspective in an investors note yesterday. “The prior record high was 695k in 1982; during the Great Recession when 8.7 million jobs were lost, weekly initial jobless claims peaked at 665k,” the investment bank wrote, noting it’s predicting the unemployment rate to peak at 12{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} in Q2 before falling to 8{4bae5313c1ffa697ce99995897f7847f1ebf3bca0fb7c37396bb602eb24323d3} at year-end. Now the focus is on next week’s number, which will almost certainly be worse. BofA Global Research, for example, sees an additional 4 million to 6 million Americans out of work in April.

5 trillion. Stocks have been flying this week because of one big reason: stimulus packages. The Group of 20 nations on Thursday committed to spending $5 trillion in fiscal measures to keep the global economy from falling into a Great Recession-like funk. Of course, the U.S. plans to spend $2 trillion to help the country’s hardest hit workers, companies and municipalities. (Check out this stimulus payment calculator a grad student sent me to see if you qualify.)


We’re nearing the end of our third week under lockdown. Note: it’s an Italian lockdown. It’s not as strict as the no-cappucino-after-11a.m rule, but it’s still got teeth. We’re allowed out of the house, but we can’t venture very far.

Over dinner last night, I asked my fellow cellmates wife and kids: What’s the first thing we should do once the lockdown order is lifted?

My wife: a nice fish meal. (Our fishmonger has closed up shop; we’re getting our protein fix from less savory food sources.)

My daughter: gymnastics!

Her twin sister: I don’t want the lockdown to end.

The rest of us: What!?!

I puzzled over her response for a while before assembling a pro/con list of lockdown in my head. Here are the pro’s:

  • The Romans are way more courteous and respectful of your personal space with social distancing rules in effect.
  • The streets are devoid of cars. It’s so peaceful. And clean!
  • The skies are clear too; on more than one occasion, I’ve seen a young hawk swoop past my terrace.
  • My motorino and car won’t start. It’s probably the battery. I couldn’t care less.
  • No chauffeuring the kids all over town, no schlepping to gymnastics practice three nights per week.
  • I can get away with wearing my Patagonia hiking pants most days, and nobody gives me grief.
  • I could go on.

I then sent a text to my siblings in the states, asking what they like, if anything, about shelter-in-place rules. The responses ranged from: nuthin! to my sister enjoying having all her kids home. My semi-retired brother, in Colorado, has been exploring desolate places in the Rockies to mountain-bike, or skin-up/ski-down. It’s quiet, he told me. “No Texans or Australians.”

Are there any surprising things you’re going to miss about lockdown? Let me know.

Have a nice weekend. And stay safe!

Bernhard Warner
[email protected]

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