Another market week has begun, last week ended with a strong market rally on Friday, largely due to confidence boosting (stimulus) measures outlined by President Trump, as well as available funds being directed toward some equities which were regarded as having been oversold.

The week also begins for many with new restrictions (in metropolitan regions around the globe) limiting people’s mobility and social interaction. One of the new terms for this is “social distancing”, measures which have been taken by many governments to halt the spread of Covid-19. The result is closure of business establishments all over. For those able to work remotely, this is becoming a new norm. However, many small and independent businesses are shut-down causing loss in revenues and unemployment for millions.

The new measures have also caused initial consumer panic, with people rushing to stores to buy provisions, the two most discussed on social media, being hand sanitizer and toilet paper. No doubt many have viewed and shared video clips and stories about same. The news from cities like Hong Kong, where residents have already been under mobility restrictions for seven weeks, is that their public transit is still running and they are not without essential goods and services, including the aforementioned ones, above. So as New Yorkers wake to a city with shuttered bars and restaurants, more calm is called for.

With all that said, what do TalkMarket contributors have to say about the coming week? George Krum, in a TalkMarkets exclusive, SPX, Bitcoin, Gold, Oil And G6 Targets For The Week Of March 16, looks at the charts for signs of what last Friday's end of the week rally can tell us. A look at the SPX charts shows that "market breadth bottomed out on schedule, and is rebounding from oversold levels", and "for a real show of continued strength, however, the SPX needs to break above 2880, which is a pretty tall order. Failure at the upside weekly range will signify that the correction hasn’t run its course yet".

Steve St. Angelo digs up data in his article "Major Economic Depression Ahead? Global Oil Demand To Fall Drastically" to show how the impact of global quarantining is reflected in the declining demand for oil and that both are harbingers of a serious and severe downturn and the end of the U.S. shale oil industry, "I will go as far as to say that I doubt Global GDP will ever surpass the $87.2 trillion in 2019. Why? As I stated, when U.S. shale oil peaks, so will global oil production. Falling global oil production translates into declining Global GDP. When oil prices fall to the high teens, it will be the death knell of the U.S. shale oil industry, regardless of bailouts or price controls."

Andre Gratian, also looks at the charts "Has A Countertrend Rally Started?" and suggests that Friday's rally was more volatility rather than a first bear market rally and that we can expect more of the same in the week to come, "SPX looks as if it is in the process of completing a pattern of secondary distribution.If so, it could be followed by another significant decline." His chartology is worth a look.

Kurt Kallaus, in Bonds Yield To Covid-19, discusses the anticipation that preceded the current round of Fed Funds rate cuts, but how no one expected interest rates to drop quite so quickly, due to Covid-19, "Despite a massive 150 basis point cut in Fed Funds from 1.5% to zero in just 11 days, along with massive fiscal stimulus, stock and bond markets continue to panic. The last time the Fed Funds interbank borrowing rates were pushed to 0% was late in the Great Recession of 2008 – 2009." He writes that a small silver lining in the accompanying drop in mortgage rates is "the eventual flood of mortgage refinancings once the dust settles from the COVID-19 Bomb that is cratering the economy. The 15 Year Mortgage rate has fallen under 3% but could drop close to the 2% range in the weeks ahead." He does not mention a possible wave of new foreclosures as more people become unemployed.It is worth noting again that Kallaus also cautions that, "This is still not the time to Buy the Dip! For those who raised some significant cash reserves when indicated, it may be tempting to buy, but in this biologic market panic, valuations are not yet relevant. The only measure pertinent to this virus plagued investment market is a biologic metric indicating that COVID-19 is reaching a contagion plateau."

The week's trading is already in full swing in Europe and other parts of the world and as the Research Team at Fullerton Markets note in, For The First Time In Decades – Fed’s QE Jitters Investors, "Dow Jones Industrial Average futures slid over 1,040 points, or 4.6%, while S&P 500 futures dropped 4.8%, after earlier hitting a limit designed to stall further drops." They also address the next round of quantitative easing, QE4 which is to be enacted by the Fed and which will entail buying, "$700 billion in Treasury and mortgage-backed securities".

That's a wrap for today's TalkMarkets Monday Chat. Look for another week of Covid-19 containment actions to be taken by governments around the world and more saw-tooth charts as the markets react to them. Spring awaits us, next week.