Bulls See U.S. Economic Rebound Coming Into View

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

News of the Grand Reopening of America last week was complemented by President Trump signing $485 billion in additional stimulus money to keep the fire lit under what has been a remarkable rebound for the stock market.


The notion of a “V-shaped” recovery was all but confirmed by Apple CEO Tim Cook in his phone call to President Trump. In fact, President Trump recently said he and Cook speak directly.

“He calls me and the others don’t,” Trump said in August, according to Fox Business. “Others go out and hire very expensive consultants, and Tim Cook calls Donald Trump directly — pretty good.”

I do tire of Trump’s third person references. Habitual illeism tends to signal a number of personality quirks in the speaker, none of them good. But I try to stay focused on the message, which I support.


The Fed’s Bullard Is Among the Bulls Seeing U.S. Economic Rebound

Tim Cook is not alone. St. Louis Federal Reserve President James Bullard also recently said he saw “no reason” that the economy wouldn’t be able to recover in a V-shape, according to Bloomberg. It seems the market also has cast a strong vote for a pronounced economic resurgence as early as the beginning of the third quarter.

The S&P is up against its first major textbook technical test where a downward sloping 50-day moving average (orange) provided stiff short-term resistance last week after two attempts to punch through to the upside. Momentum is on the side of the bulls, while the charts favor the bears.

We’ll know soon enough who wins this technical tug-of-war. Earnings this week from Microsoft (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), Google’s parent Alphabet Inc. (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN) and Facebook Inc. (NASDAQ:FB) will either provide the firepower to lift the S&P to 3,000 or show that there is more wood to chop at lower levels.

Data Support Bulls Who See U.S. Economic Rebound

On the subject of the economy, current data and corporate guidance seem to argue more for a “U-shaped” recovery. But at the moment, the Wall Street maxims of “don’t fight the Fed” and “don’t fight the tape” are ruling the investing landscape. Could it be that all the money in the world just wants to come to the U.S. markets and call them home? I think so.

Consider that the stock market, bond market and dollar index are all trading higher — along with gold! Go figure. Where is the rotation out of bonds and into stocks, or out of the dollar and into gold or out of gold and into the dollar? It is ALL working right now, save for the dead-cat bounce in oil within a well-defined secular bear market.

So, what’s behind the tandem move higher for U.S. bonds, stocks, dollars and gold? I’ll bet a country breakfast that there is some real fear surrounding the immediate future of the soundness of the European banks, many of which are now trading below their 2007-2009 lows. All the actions taken by the European Central Bank (ECB) to shore up the banking system in Europe have greatly failed to restore confidence — including well before COVID-19 broke out.

Exclusive  The Secret to a 96% Win Rate

The Stoxx 600 Banks Index that comprises the largest and mid-cap banks throughout the European Union (EU) and the United Kingdom (UK) took out its 2009 low last week. Thus, I believe the flood of interest in U.S. assets is partly rooted in the financial tide going out in Europe. Gross domestic product (GDP) in the eurozone is contracting hard and bracing for the sharpest drop since World War II.

There are deep systemic and structural problems with greater Europe that could well lead to the dissolution of the European Union following Brexit. Europe is an absolute mess and, as the third-largest economy in the world, bears are closely monitoring how the region manages through the impact of COVID-19.

Large bank restructurings and failures across the pond will not go unnoticed in U.S. markets. And yet we live in an era of too-big-to-fail, so look for some nationalization of certain banks to occur and even more unlimited monies to be directed at this fluid situation by the ECB. The chart above suggests a hard landing is just ahead, and I’m not sure there is any way to avoid it. Hence the rush to the safe haven of U.S. markets.

While Bulls See U.S. Economic Rebound, European Banks Show Weakness

Looking at the most plausible scenarios, whether a V-shaped or U-shaped recovery is the path forward, it’s a far cry more positive than the deep and lasting recession forecast for Europe.

Energy prices may bounce a bit more through production cut manipulation, but that market is now going through a major culling of the herd and price destruction in all subsectors of the energy space. Great news for consumers and businesses, bad news for energy investors.

Exclusive  Short-Term, High Grade Corporate Bonds are a Sweet Spot

Circling back to this week, look for the FAANG stocks of Facebook, Amazon, Apple and Google, along with the so-called MAGA ones of Microsoft, Apple, Google and Amazon, to have a clear impact on investor sentiment. Any negative reaction by the market (selling on the news) to these heavily crowded trades should be used to consider initiating and adding to blue-chip U.S.-based dividend and dividend growth stocks. It is the sweet spot for income.

share on:

Like This Article?
Now Get Bryan's FREE Special Report:
Top Monthly Dividend Payers

Get paid every single month by some of the world’s biggest companies.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader


Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology and its impact on our lives.  He’s an established investor, bestselling author, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

Product Details

  • Technology Report
  • Technology Report PRO
  • Moonshots
  • Private Reserve
  • Millionaire Circle


DayTradeSPY was founded by head trader Hugh Grossman, a retired internal auditor for a Fortune 500 company. After years of first-hand experience trying out one trading strategy after another, Hugh instead developed his own trading system centered around day trading SPY options. That’s it... Nothing else.

Product Details

  • Trading Room
  • Pick of the Day
  • Inner Circle
  • Online Workshops