Why these special Purpose Acquisition Companies are so hot and what the phenomenon says about froth in the market. And golds record rally. Is the yellow metal poised finish even more gains . On the barrons roundtable, my colleagues. So, jack, this week was interesting. Four very powerful dudes get hauled up in front of congress, theyre asked some dumb questions, some tough questions, the market shrugs, the next day they come out with earning, and three of the four stocks soared. Yeah, actually rose during and after the testimony and end then again after results. The stock market this week, if you look at the s p 500, it was up close to 2 . Now, thats a wonderful result, but its particularly great when you consider the backdrop. What did we learn this week . Gross domestic product, the economy shrank 9. 5 from the quarter before. If you feel compelled to annualize that figure, yes jack no, please dont 33 , right . Either way, its the housiest number in 70 years of lousiest number in 70
Hitting stocks. Wall street falls as the virus weakens the recovery. S p slipping, led by energy, financials, and industrials. Lets get started with a check of the markets. We are seeing u. S. Futures flat, after we had a solid risk off session in new york. We had a resurgence in virus cases and news the white house is weighing tariffs on european exports. We have the imf downgrade of the 2020 Global Economic forecast, so the s p 500 saw its largest fall in almost two weeks. All 11 sectors on the s p 500 sank. The nasdaq composite falling for the first time in nine sessions, down more than 2 , halting the longest winning streak of the year. This, as we continue to get more political news on how the coronavirus pandemic could affect the political schedule Going Forward towards the november elections. Democrats, saying state delegations shouldnt attend a convention. Saying they should work remotely. Pressure coming not only from the fragile economic recovery that also u. S. Crude invento
Expected i think were going through a period of i hate to use that cliche, rational exuberance. People want to get back in the market and theyre being when you see this nickel you featured highly for the last couple days, people are just anxious to put money. Theres a lot of money on the sidelines. And i personally think that we should be concerned and be concerned about whats ahead for the economy. The rest of the summer and into the fall i mean, i think were living in artificial dream world at the moment i think unemployment is going to increase i think that businesses are not going to come back to work as fast as they have. On the other hand, on the other hand, and im going to be selfish, we have companies that are doing well in this environment. But they in special neariches. There are companies who are going to increase and probably certainly a company like facebook and apple and several of the others you mentioned are beneficiaries of this times were living, the Delivery Companie
Points, of course we had 74 earlier in the week sort of reflects that. It does indeed. Lets talk about it. They join us now to break all of that down. Good morning, guys. Good morning. Tobias, your target for the s p in june 2021 just a bit higher than where we are right now. 3160 given that, how should investors be positioned . Is it just a matter of averaging back in if youre not in the market and doing it cautiously or what do you expect . So i think you just put it perfectly and cautiously using that terminology i think the market right now is a bit ahead of itself so i think its a bumpier road Going Forward in the nearer term four key issues to worry about, one the unemployment numbers, how quickly they come back the fact that most of us will probably be somewhat in terms of practicing social distancing not going back to normal until things like vaccines, commercial industrial lending standards data suggest tightening of Credit Conditions which usually means no big bounce really i
Which prevent michiganders crossing the street to visit family members. No relaxation of the social distancing rules from President Trump. Hes considering extending the keep your distance regulations into the early summer. Then theres this. Antibody tests that show far more people have been through covid19, three million in new york state, 20 of new york citys residents have had it. That means the fatality rate, the number of people who died from the virus, comes way, way down. Interesting. Quickly to the markets. Not Much Movement at the open today. Orders for durable goods in march down 14 , yeah, thats bad but it was expected. The dow is going to be up 193. I call that little movement. How the times change. We will be back to 23,500, big gain modest gain for the dow, nice gain for the s p and for the nasdaq as well. Look at oil, staying at low levels. We are looking at 17 a barrel. In the absence of demand, we are still not driving very much, we are running out of places to store al