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Can the markets match last week’s monster rally?

June 8, 2020, 9:05 AM UTC

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Good morning. After Friday’s blowout jobs-fueled rally, U.S. futures are climbing again. It’s a mixed picture in Asia and Europe.

Let’s check in on the action.

Markets update


  • Asia’s major indices are solidly in the green in afternoon trade. All major indices are higher, led by Japan’s Nikkei (+1.3%).
  • Huawei plans to go on the offensive to preserve its spot as the 5G vendor-of-choice in its key U.K. market. Part of its campaign will be to convince Britain (and the world) it’s not controlled by Beijing.
  • Crude is climbing following an agreement by OPEC and its allies to extend production cuts.


  • The European bourses fell out of the gates. The benchmark Stoxx Europe 600 opened 0.7% lower.
  • Could Big Pharma be getting a little smaller? Bloomberg reports Gilead and AstraZeneca, both of whom are working on COVID-19 cures, are kicking the tires on a merger. It would be the biggest healthcare tie-up ever, creating a $240 billion giant.
  • Britain is on a collision course with airlines furious over the country’s quarantine measures for inbound travelers. It goes into effect today despite threats from BA, Ryanair and Easyjet to sue over the measure.


  • The Dow, S&P 500 and Nasdaq futures point to a positive open. The Dow just came off a monster week, climbing 6.8%, its best stretch since early April. I may have to trot out that Dow 30K quiz again.
  • Boeing and the airlines were big gainers last week. But Big Tech is still the sector everyone wants in their portfolio, especially popular with individual investors.
  • What’s on this week’s calendar? The Fed meets Tuesday and Wednesday. It’s not expected to touch rates. We also get key data on the inflation picture with CPI and PPI reports mid-week, and the U. of Michigan consumer sentiment report on Friday.


  • Gold is up.
  • The dollar is flat.
  • Crude continues to gain ground. Brent is now above above $42/barrel.

Let’s head to the Inbox

On Thursday, before Friday’s surprise payrolls report, I shared here an Allianz investor sentiment survey that showed—to me, anyhow—a disjointed view of the future. Investors were largely pessimistic about the economy, fearing a big recession, but not so fearful that they were compelled to sit out the current markets rally. I then put the question to Bull Sheet readers: does all the doom and gloom—the pandemic death toll, the sheer number of unemployed, the great social unrest, the historic deficit spending on bailouts, the collapse in growth—factor into your investing decisions.

I got some very interesting feedback, which I’m sharing here this morning. They’ve been edited for brevity.

Stocks: the only game in town

When everything is down, particularly interest rates, is there another game in town, if not the stock market? — J.A.

In Fed we trust

I think this rally is an expression of the belief that central banks will be effective at backstopping asset prices. They will act as the almighty buyer when everyone wants to sell. So this is essentially the confidence that liquidity to exit will be present no matter what. To quote Stan Druckenmiller “when the Fed buys bonds, bonds go down & stocks go up!”  — S.D.

Ignore the headlines, and stick to the plan

There are absolutely conflicting signs about the future of our economy and therefore my personal portfolio. To me it is incongruous to sustain the longest bull market in the face of radical decrease in demand due the pandemic, horrific unemployment, trade wars and unprecedented …government shortfalls and debt. On a daily basis, I resist the temptation to jump in FOMO. I take a deep breath and remember lessons learned from the dotcom crash and the GFC. Stick with my plan. For many months I have been accumulating cash every time the market jumps up by taking a little more equity off the table. Other than that, I try to ignore the business news, stick to my asset allocation and wait for the inevitable opportunity to buy when everyone else is selling. — R.R.

It’s about politics, stupid

Bottom line, I believe there is a disconnect between the current stock market recovery, and the reality of our political future. The underlying economy is strong but uncertainty is high. As the summer progresses, uncertainty will grow. Labor markets will continue to suffer. Americans are feeling very uncomfortable about what’s next, particularly in the northern and western big cities, and as the result of the demonstrations and relentlessly negative news. Politicians—particularly in an election year—seem to have one answer:  Mortgage the future with borrowed money. Whether for families or countries, that solution is always temporary and can end up only one way. — S.C.

Buy, buy, buy!

Key takeaway: you don’t HAVE to hit the exact bottom to make money. I feel investors including myself may detect another dip in the market coming, but we feel strongly it won’t dip near the March 23 bottom, so if you invest now, you have a feeling that you’re guaranteed to make a profit. On the struggling economy and ‘real life GDP’ outlook? It’s simple, America will bounce back, and the timeline in the mind of the long term investor (I’m 33) is somewhat irrelevant. We know it won’t be easy but we also know we will come back. People are itching to go out and spend money even if they don’t have it. Buy Buy Buy!—D.T.



The government lifted the last of the major lockdown measures on June 3, and so, as I mentioned, I’ve taken Bull Sheet on the road. I’ll explain more tomorrow, but, for now, here’s a picture of where this week’s dispatches will come from.

View of Sibillini Mountains. Original photo: Bernhard Warner

I’m pretty sure the sheep are trying to spell out, “Buy Apple.” What’d you expect? They’re sheep.


Have a nice day, everyone. I’ll see you here tomorrow.

Bernhard Warner

A note from my Fortune colleagues on a timely new initiative:

Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here.

As always, you can write to or reply to this email with suggestions and feedback.

Correction and update, June 8, 2020: This post has been updated to include the Brent crude price as “above $42/barrel.”

Today's reads

The $173 million question. New York City will slowly begin getting back to work this week, but shops won’t open until, at the earliest, July 8. This is creating a huge hole in the city’s finances. The city’s lockdown stoppage has cost the Big Apple so far this year $63 billion, Fortune’s Shawn Tully writes, or $173 million a day. “New York’s bill per resident is twice as high as that facing the rest of America west of the Hudson River,” he notes. Is it time to rethink New York's lockdown?

Out of work. Out of whack. How could it be that so many economists were so far off in their unemployment forecasts last week? Economists thought the unemployment rate would approach 20%. The official number on Friday morning though came in at 13.3%. Before anyone does a victory dance, there are a number of anomalies to this report that make the official number sound way too good to be true.

Silencing shareholders. Social distancing rules have relegated most annual shareholder meetings to web-streamed affairs this year, effectively silencing shareholders in the age of COVID-19. My colleague Katherine Dunn and I spoke to activist shareholders across the U.S. and Europe, and we found a shareholders' rights crisis brewing.

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Market candy

Quote of the day

“We are losing the people who can tell us in first person what happened. And it’s a shame, because when we lose the historical memory we lose ourselves.”

That’s Rita Magnani lamenting the recent death from coronavirus of Gildo Negri, an Italian resistance fighter from World War II. Negri, 89, was active until his last days, giving first-person accounts of the epic fight against fascism and Nazism. The coronavirus has killed a large number of these war heroes, the last witnesses to that noble battle, and the ones who could set the record straight as dark forces in Europe try to re-cast the story. It’s a timely and powerful piece by the New York Times’ Jason Horowitz as the world remembered the 76th anniversary of D-Day this weekend.