Note: This thread is related to #COVID19.

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Gavin Baker
+ Your AuthorsArchive @GavinSBaker Husband, Becky Painter. CIO, Atreides Management. Former PM, Fidelity OTC fund. No investment advice, views all my own. Mar. 15, 2020 1 min read

1) We are in a severe recession right now. My European macro friend called me and he is still very cautious.

Likely the largest demand shock in history. The fastest bear mkt in history. Peak levels of fear and volatility. And the biggest rate cut in history.

2) Electricity consumption in Madrid - a reasonable proxy for economic activity - is apparently down 30%. Would love a Twitter fact check on this.

3) Opentable data got significantly worse yesterday with multiple large cities now seeing restaurant traffic down over 60%.

And likely going down more as more bars and restaurants are closed - happening in multiple states.

4) ”Some of us have worked in aviation through the global financial crisis, the Sars outbreak & 9/11. What is happening right now as a result of Covid-19 is more serious than any of these events. It is a crisis of global proportions like no other we have known.” British Air CEO.

5) Mnuchin setting the stage for bailouts of multiple industries. Cannot imagine they will be equity friendly.

6) Reminder that all companies are going to miss numbers and guide down dramatically.

Would like to just get this over with - the market would benefit from the EPS impact being framed correctly.

*Huge* gap between dividend yields and rates. Will matter eventually.

7) Beyond the Fed cutting rates and QE4, important to remember *massive* stimulus is coming, warmer weather will likely slow the virus down and stage is being set to militarize the virus response via FEMA. Note the uniforms at the press conference.

Lots of cross currents

8) Fact that the Fed cut before Congress really acted on fiscal stimulus (need $500b plus) means that economic situation is so dire that Fed could not afford to wait for the market to pressure Congress into acting.

9) “Guidance” tomorrow from Federal government will likely formalize shutdowns of bars, restaurants and other public areas being announced by the states. They wanted to carefully sequence the news, although didn’t really work with futures limit down.

10) Curious to know who executed that buy program in the last ten minutes of trading on Friday.

You can follow @GavinSBaker.


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