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Is the second stock market crash of 2020 about to hit?

first_img Enter Your Email Address I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Our 6 ‘Best Buys Now’ Shares Kevin Godbold has no position in any share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Kevin Godbold | Sunday, 31st May, 2020 center_img Last week was another good one in the markets. And on the surface, the prospect of a second stock market crash seems remote. Many shares went up, buoyed by the news that lockdowns are gradually lifting around the world.On top of that, companies have been updating investors about their trading and financial performances. In many cases, underlying businesses have been coping through the crisis better than investors feared.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Will there be a second stock market crash?However, it’s natural to feel nervous about the stock market when it’s going up. Often, shares seem at odds with what’s happening on the ground. Indeed, many businesses have been crushed by the crisis and haven’t seen revenues for weeks.As human beings, we are all still suffering. We haven’t been able to visit our loved-ones for what seems like an eternity. The ongoing threat of the virus remains very real. So why are stocks behaving with such exuberance?There isn’t a cast-iron explanation for the rises in the stock market. It’s true that the stock market tends to look forward. What we see now is perhaps the market trying to predict where we’ll be in the real world three, six or even nine months ahead.But we all know it isn’t going to be an easy journey. Lockdowns are lifting, but only for companies in England, for example, that make sure their operations follow government guidelines for working safely in a world with coronavirus.Costs set to riseAnd following the guidelines aimed at reducing the transmission of the virus will add to costs for many firms. On top of that, measures such as enforcing social-distancing will reduce the throughput of customers in many businesses such as shops and others.It seems clear that lower footfall will lead to reduced revenues in many cases. Indeed, a squeeze on revenues married to a boost to costs can only put profit margins under pressure. And it makes sense that share prices are lower if profits will be smaller.But the forward-looking visibility is so bad that many companies have withdrawn guidance on earnings and trading. On top of that, many have cancelled or postponed shareholder dividend payments.With so many uncertainties still in the air, we might think that shares should stay down where they’ve been until the coronavirus passes. Indeed, even Warren Buffett has been uncharacteristically reticent about buying ‘cheap’ shares. And he’s on record as admitting he has no idea what will happen next. In fairness though, Buffett has made few macro calls. And his decision to sell out of the airline stocks he held is understandable given that the entire industry may never again be what it once was.Is the second stock market crash of 2020 about to hit? Maybe. But stock markets have always climbed a wall of worry. And I’m handling the situation by buying selective stocks and holding them with a long investment horizon in mind. Ten years from now, even if there’s another crash, I may be glad I bought shares now. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Simply click below to discover how you can take advantage of this. Is the second stock market crash of 2020 about to hit? Image source: Getty Images See all posts by Kevin Godboldlast_img

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