Monday 9^th of March will be remember as another Black Monday. Again. If you thought the Coronavirus wouldn’t be enough to scare the market, the Saudis and the Russians disagreed on the crude’s price and the disagreement led to another blood bath in addition to the original blood bath.

On the Coronavirus side, the lockdown increased the panic level on the European Market who was mainly terrified to be THE NEXT ONE and we experienced a sharp sell – since it probably was not enough to kill the market, the other panic on oil destroyed any envy to buy anything.

The stock market has been crushed in every way, the French Market was down close to 9%, the DAX erased 8% and in Milano, we were down 10%. At the opening of Wall Street, circuits breakers were immediately activated in order to give some time to think to the traders. After a little pause, and a new attempt, the market kept selling off and ended at the (almost) lowest point of the day. We can clearly called this horrific day a “capitulation” – Over this 11 years of this bull market we have been in, we’ve already experienced this kind of capitulation – since we have usually no memory at all, we simply don’t remember, but it happened already.

We still believe that there is some hope and future in this economy and we’re monitoring the right timing to get back in the market since we still have some hopes in the future of this economy – any improvement on this Coronavirus story could drive us toward a huge rally. In the meantime we should check Trump’s Twitter account because according to his speech yesterday, he’s ready to improve the fiscal stimulus AND the FED will meeting next week.

And we don’t forget the fact that Coronavirus numbers are getting better in China – there is some improvement and if the market is going below the level were we stopped this Monday, that would be clearly a very bad news for Mister Market.

So far, we tend to keep a positive stand and trying to be constructive and enjoying the volatility in the market.

Thomas Veillet
CIO Merion Swiss Partners