• cedric lefebvre

Monday 27th, April 2020

Mis à jour : 12 juin 2020

Disclaimer: After my relatives asked for stock trades amid the coronavirus crisis, I decided to record below what I have been reading, what makes the market move, my opinions and the lessons I learnt across these readings.

Preferred source of business news: Bloomberg

Preferred source for trading strategies: SeekingAlpha

Quote of the day: “The stock market is not the economy... And the SP500 is not the stock market”

Opinion: As expected with the idea outlined in “Opinion” dated 21st of April, the WTI June futures are crashing as they dropped nearly 25%. This decline confirms the idea of the negative price for June futures.

Lesson of the day: Learn to time the market and that unknowns will always remain.

When opening my MAY 2750 PUT SP500 position, I was betting against the over-optimism of the investors. Yet, the SP500 unexpectedly kept rallying as the FED made unprecedented announcement, forcing me to close my position at 2760. I was hence battling against the FED, not the market.

Market news

· The five largest stocks now account for 20% of the S&P 500 market cap, exceeding the 18% concentration level reached during the dot-com bubble. Historically, such narrow breadth is a poor signal for future market returns. Stock-market breadth is an indicator of how many stocks are advancing relative to those that are declining. When a market has narrow breadth, it means a relatively small group of stocks is driving the upside in the market, while the majority of stocks are declining.

· Deutsch Bank post better than expected profits in 1Q report. Deutsche Bank stock rose as much as 6.7% in early Frankfurt trading. Posted net income of 66 million euros defied analyst predictions for a loss. The surprise growth suggests the lender benefited from a surge in client trading as the virus triggered violent market swings. Nonetheless, DB CEO warns “This extraordinary economic environment suggests that we will see a higher level of credit defaults”.

· Wall Street, helped by a new massive government aid program, ended Friday on a positive note despite the week was marked by mixed business results, disappointing indicators and oil yoyo.

· The NYSE rose at the opening Monday, encouraged by the hope of seeing the economy reopen soon at the start of a week rich in corporate results and meetings of central banks. The broad S&P 500 index, which represents the 500 largest companies on Wall Street, appreciated by 0.66% to 2,855.59 points.

· S&P 500 companies are expected to see profits fall by 15.2% on average in the first quarter and their sales will stagnate. The blow should be even harder in the second quarter, analysts currently predicting a 31.9% plunge in profits and an 8.2% drop in turnover.


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Weekend 25th and 26th, April 2020 Weekend reading

North Korea: · Questions about North Corean leader's health intensify. In the event he must be replaced, the sister of the North Korean dictator, Kim Yo Jong, seems to be the favorite to replace him.

Friday, 24th April 2020

Quote of the day: The disinfectant knocks the coronavirus out in a minute. One minute,” “Is there a way we can do something like that by injection inside?” POTUS Opinion: As expected in “Opinion” of t

Thursday, 23rd April 2020

Quote of the day: “In order to protect our great American workers I’ve just signed an executive order temporarily suspending immigration into the United States,” Trump said Opinion: Exec. Order for 60


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