Hello, I am currently an employee at Morgan Stanley doing Tech Support for our employees at the firm, and from time to time, financial analysts would call in for basic technical difficulties like log in errors, internet issues, etc... With the recent volatile action in the stock market, increasing unemployment rate, Covid-19 Pandemic shutdown, and many talks of a recession, I decided to ask three financial analysts that I assisted about their opinions and thoughts on the situation. Their names cannot be disclosed to I will refer to them as A, B, and C. They are all senior Financial Analysts.
First, I asked them what their day to day tasks are as a financial analyst. A, and C said that they manage portfolios for clients, and trade stocks, bonds, commodities, etc... With the goal of increasing clients' portfolios and to protect their assets. B said that his day to day task does not involve much trading, but he does manage portfolios and outsource the trading to other teams. B also disclosed that each financial analyst have their own way of trading and portfolio management.
Second, I asked them if a recession is on its way. A said that a recession is indeed on its way with the increased unemployment rate, loss of jobs, and Covid-19 pandemic. B stated that the recession is already here, and when asked if the cause was the pandemic, B said that there were many warning signs before the pandemic even started like interest rates lowering despite the stock market and housing market increase. C also said that the recession is looming upon us.
Third, I asked them why the market is still increasing despite the high unemployment rate and Covid-19 shutdown. A stated that the market does not care what the public thinks, and the public is actually only a small part of the liquidity in the market. The market is currently held up because of stock buy backs from companies and the government stimulus programs. A also gave me some good advice for investing such as 1. Take your own sentiment and emotion out of trading, and read what the market is telling you, not the news or any other human being. Big names that are disclosing their views on media are businessmen at the core, and they are doing so to 1. Promote their business and firm and 2. Sway the public sentiment in one way, and doing the opposite in private. Morgan Stanley firm also promote the firm by having a public speaker on big media from time to time to talk about markets. B stated that the crash and bottom on 3/23 was caused by the Covid-19 panic, but the market is increasing back because of the government stimulus money and guaranteed safety. C stated that the market is increasing because despite what the public thinks, they play a small part in the movement of the market, and the market is mostly influenced by big money, plus the companies are doing buybacks of their own shares and government stimulus programs counter the panic of the public.
Fourth, I asked them how they think the markets will act moving forward. A stated that the market is going back up, and we will not see another lower low. B stated that the market will go keep increasing, and does not think that there will be a lower low, but we might retest the low, but not likely to. C also agrees that the market will go back up to new highs.
TLDR: I asked 3 Financial Analysts at Morgan Stanley what they think of the current stock market situation and all three agreed that the 3/23 bottom was indeed the bottom and we will not see another low. The stock market crashed due to the Covid-19 shutdown panic, but government stimulus programs counter that panic and act as a safety guarantee, plus companies are doing buybacks of their stocks. The public believes that recession is currently here, and so do the 3 financial analysts, but this time is different compared to the past recessions and should be treated accordingly.
Will do more updates as I speak to more financial analysts.