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Everyone should expect the stock market to thrive off this data today...

by throwaway_USD 7y ago

treyfitty 7y ago
Why’s that? I see that the SP500 is rising... but why is this “good news” for businesses?
- throwaway_USD 7y ago
  The danger was businesses losing customers (revenue/income), which these initial numbers confirm...but on the other hand these jobless folks (and the whole country)just took out a $6T loan, of which $5.75T is going to these businesses ($1.75 will not have to be paid back and $4T will be interest free loans, and likely in may cases these companies will actually have negative interest rates, in other words they will make money on borrowing these tax payer loans). These are the very same companies that will also avoid paying US taxes. Public companies cut all their costs/expenses and are going to be given $5.75T...mainstreet can't buy on these lows (because they have no jobs/income, fear and lack of liquidity are a bad combination) and the companies are flush with cash to buy back stocks now before they get the real windfall from tax payers. In short, public companies will be spending today to buy their own stock.
  - treyfitty 7y ago
    But it's been confirmed that stock buybacks will not be allowed for companies receiving a bailout. Am I missing something more here? https://www.marketwatch.com/story/coronavirus-stimulus-package-set-to-ban-stock-buybacks-for-companies-that-get-aid-2020-03-25 https://www.marketwatch.com/story/coronavirus-stimulus-packa...
    - throwaway_USD 7y ago
      >Am I missing something more here? Apparently...they are doing the buy backs now (like right now) while they are flush with cash/no expenses, main street can't invest, and before they get their bailout cash. Never mind the buy back prohibitions are being majorly overstated.
czbond 7y ago
I expect you are being facetious. The reason the market is up is a short squeeze.
generalpass 7y ago
> Everyone should expect the stock market to thrive off this data today... There are too many huge announcements for anyone to claim they know why the (millions?) of individuals whose actions are reflected in market prices from noise.
- throwaway_USD 7y ago
  >why the (millions?) of individuals whose actions are reflected in market prices from noise. Its not individuals buying, individuals sold to secure cash during this unknown period...it is the corporations themselves buying in bulk now, because they are flush with cash, cut all costs, and have $5.75T in cash coming their way in the form of loans that will not need to be repaid ($1.75T worth) and negative interest loans ($4T worth). Point is companies will be buying today while they can.
  - generalpass 7y ago
    > Its not individuals buying, individuals sold to secure cash during this unknown period...it is the corporations themselves buying in bulk now, because they are flush with cash, cut all costs, and have $5.75T in cash coming their way in the form of loans that will not need to be repaid ($1.75T worth) and negative interest loans ($4T worth). Point is companies will be buying today while they can. Or maybe they are buying because their factories have been shuddered and they have capital sitting with no other place to put it. Or maybe they are buying because they are worried about inflation and are moving out into a better asset class for the condition. Or... I realize there is some redundancy there from yours, but even "only" large investors acting (which, itself, seems an assumption) there are still far too many to claim to know their individual justifications.
    - throwaway_USD 7y ago
      >Or maybe they are buying because their factories have been shuddered and they have capital sitting with no other place to put it. That is one of my points: >because they are flush with cash, cut all costs

Everyone should expect the stock market to thrive off this data today...

treyfitty 7y ago

Why’s that? I see that the SP500 is rising... but why is this “good news” for businesses?

throwaway_USD 7y ago
The danger was businesses losing customers (revenue/income), which these initial numbers confirm...but on the other hand these jobless folks (and the whole country)just took out a $6T loan, of which $5.75T is going to these businesses ($1.75 will not have to be paid back and $4T will be interest free loans, and likely in may cases these companies will actually have negative interest rates, in other words they will make money on borrowing these tax payer loans). These are the very same companies that will also avoid paying US taxes. Public companies cut all their costs/expenses and are going to be given $5.75T...mainstreet can't buy on these lows (because they have no jobs/income, fear and lack of liquidity are a bad combination) and the companies are flush with cash to buy back stocks now before they get the real windfall from tax payers. In short, public companies will be spending today to buy their own stock.
- treyfitty 7y ago
  But it's been confirmed that stock buybacks will not be allowed for companies receiving a bailout. Am I missing something more here? https://www.marketwatch.com/story/coronavirus-stimulus-package-set-to-ban-stock-buybacks-for-companies-that-get-aid-2020-03-25 https://www.marketwatch.com/story/coronavirus-stimulus-packa...
  - throwaway_USD 7y ago
    >Am I missing something more here? Apparently...they are doing the buy backs now (like right now) while they are flush with cash/no expenses, main street can't invest, and before they get their bailout cash. Never mind the buy back prohibitions are being majorly overstated.

czbond 7y ago

I expect you are being facetious. The reason the market is up is a short squeeze.

generalpass 7y ago

> Everyone should expect the stock market to thrive off this data today... There are too many huge announcements for anyone to claim they know why the (millions?) of individuals whose actions are reflected in market prices from noise.

throwaway_USD 7y ago
>why the (millions?) of individuals whose actions are reflected in market prices from noise. Its not individuals buying, individuals sold to secure cash during this unknown period...it is the corporations themselves buying in bulk now, because they are flush with cash, cut all costs, and have $5.75T in cash coming their way in the form of loans that will not need to be repaid ($1.75T worth) and negative interest loans ($4T worth). Point is companies will be buying today while they can.
- generalpass 7y ago
  > Its not individuals buying, individuals sold to secure cash during this unknown period...it is the corporations themselves buying in bulk now, because they are flush with cash, cut all costs, and have $5.75T in cash coming their way in the form of loans that will not need to be repaid ($1.75T worth) and negative interest loans ($4T worth). Point is companies will be buying today while they can. Or maybe they are buying because their factories have been shuddered and they have capital sitting with no other place to put it. Or maybe they are buying because they are worried about inflation and are moving out into a better asset class for the condition. Or... I realize there is some redundancy there from yours, but even "only" large investors acting (which, itself, seems an assumption) there are still far too many to claim to know their individual justifications.
  - throwaway_USD 7y ago
    >Or maybe they are buying because their factories have been shuddered and they have capital sitting with no other place to put it. That is one of my points: >because they are flush with cash, cut all costs