On this week’s episode of Tape Talk, Quint and Daniel discuss how they’re analyzing the current market moves and what they’re keeping an eye on to indicate where we go from here.
Where We Go?
No one really knows for certain where markets will move from here. While many may attempt to call the bottom or top of the recent volatile moves, the situation in health, credit, and oil markets are all rapidly evolving which makes any prediction more of a guess.
From Oil to Credit
Before markets started to move on the COVID-19 pandemic there was an emerging crisis in oil prices. While consumers may cheer lower gas prices, even with nowhere to travel right now, the ripple effects in the economy are being felt. As oil prices slip below profitability levels for domestic drillers their entire supply chain comes under pressure and eventually the financial institutions that finance all those companies do as well.
Signs of Life
So where are we looking for signs of life now? Daniel is watching credit markets for an indication that the Federal Reserves’ historic interventions are going to provide the needed liquidity which may then calm other markets. Quint is watching oil prices to see some stabilization which will then give other areas of the market the peace of mind that the ripple effects may cease.