Why tempting fate too many times is a dangerous game to play.
It had become somewhat of a routine. Every night around 2am, we would be awoken by loud barking sounds emanating from our kitchen. That’s where our two German Shepherds spent their sleeping hours and that’s where our neighbourhood fox came to make fun of them. You see, our kitchen faced into the tiniest of back gardens that you could only ever find in a London suburb and the fox felt quite safe staring at our two rather large bitches through the safety of the glass doors. And so it went, night after night, the fox would visit, the dogs would run (in) to the glass door and loud barking ensued to the sheer delight of the gleeful teaser.
But then one fateful night, as he visited once more, and the dogs jumped to the doors yet again, something very strange happened: the glass gates to freedom swung open. We had forgotten to lock them the night before. I would have paid a lot of money to have been a fly on the wall, as time must have frozen still, and the fox realised that his fate was sealed. The only thing we heard was the most excruciating of sounds stemming from three animals going at it with utter ferocity, with the scent of blood driving them into an ever-increasing frenzy. As we ran downstairs and separated our dogs with all our might from the hapless fox, it was difficult not to feel sorry for the tormentor who had robbed us of so many a night’s sleep.
What does this have to do with financial markets? Not much to be honest, but then again, the most powerful man in the world suggested that we inject ourselves with toxic disinfectants to beat the Coronavirus, because you know, they work wonders when you clean the house. The White House later tried to reposition the remarks in that he was trying to be sarcastic. Sure, but that did not deter some idiots from poisoning themselves in following the advice of the jenius (yes, he actually spelled it so).
Inject or not inject, tease or not tease, up or down. The choice is there to be had for all of us, and it has rarely presented itself in such perfect symmetry. The S&P 500 sits right in the middle of the highs in February and the lows from March. In other words, the equity markets are yet utterly undecided whether we dismiss the Coronavirus as a temporary blip, or we face the abyss as the economic turmoil takes its toll. And so, are we to be the fox or the bitches? Good luck to us all.