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Tag Archives: Covid-19

Weighing the Week Ahead: A Letter from Mr. Market!

We have a big week for data and only four days to digest it. Retail sales and housing data will be most important. Industrial production will provide evidence about the strength of the recovery. Some of the punditry will get lost in the data while others continue the fruitless effort to reconcile market prices with economic fundamentals. (Schwab, Paul Schatz). I normally join in these efforts, but something special happened last week. My key questions have been answered by: A letter from Mr....

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Conventional Wisdom Is Nothing of The Sort

If you had known in October all that would transpire over the next 2 ½ months, how would you have positioned your portfolio? The conventional wisdom before the election was that a Biden win would be negative for stocks because he has promised to raise taxes and specifically corporate taxes. In 2016, conventional wisdom was that a Trump victory would be bad for stocks because of his protectionism. In both cases, conventional wisdom turned out to be nothing of the sort. After the November...

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Weighing the Week Ahead: Can Earnings Growth Justify Current Stock Prices?

We have an array of interesting data in the week ahead including inflation news, more employment numbers, and sentiment from consumers and small businesses. Most importantly we have the start of earnings season. Despite this, the political story will dominate, at least for a bit longer. While this is newsworthy, it is not the key element for investors. What best depicts this challenge to find the right focus? Let us turn to Chance the Gardener! The simple-minded gardener who knows only what...

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Weighing the Week Ahead: What Can Investors Expect before Springtime?

We can enjoy two light weeks for economic reports. Both are holiday-shortened, implying lower volume but not necessarily lower volatility. Personal income and spending will be especially interesting, along with updated unemployment claims data. It is also an especially important time to monitor sentiment. The biggest reports are schedule for the first week of 2021. The calendar will prompt many to offer specific and complex forecasts for next year. Good luck with that! It is necessary for...

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Weighing the Week Ahead: What Can Investors do about Gridlock?

We have another normal week for economic reports, featuring retail sales and housing data (NAHB Index, building permits, housing starts). Industrial production is from November, so it is a bit stale. Jobless claims continue to be a current and reasonably reliable indicator. The economy remains secondary for market participants. It has been ignored for months, so why change now? Attention has mostly been on more fiscal stimulus, with daily market moves registering even small hints of progress....

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Weighing the Week Ahead: What is the State of the Recovery?

We have a normal economic calendar with a focus on sentiment and inflation data. Economic reports remain secondary to Mr. Market. It has been a lights on, lights off situation with celebration of pandemic news and improvements in the Washington situation. We know much more than we did a month ago. It might not be a clear crystal ball, but it should be easier to identify key risks. It is time for investors to ask: What is the state of the economic recovery? In my last installment of WTWA,...

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Weighing the Week Ahead: Will Algos Go Wild?

We have a big economic calendar jammed into three trading days. The reports are of moderate interest – consumer confidence, personal income and spending, durable goods orders, and new home sales. In the current environment these will not provide market-moving news. With most of the A-Team taking the week off (and even B-Team players leaving early on Wednesday), trading volume will be lower. Normally this means low volume and little volatility. Perhaps not this time. The field is open for...

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Weighing the Week Ahead: Learning from Swiss Cheese

We have a normal economic calendar, and the earnings season is winding down. There is interesting data on housing and retail sales – the strong parts of the current economy. Jobless claims remain important as does industrial production. The economic calendar remains less interesting than politics, market gyrations, and the coronavirus. Those will be the media topics. A bigger challenge is finding a way to identify what is important and to determine the causal relationships. It is time to...

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Prospect of a Vaccine Signals a New Game is Afoot

Pfizer's extraordinary results on developing a vaccine for Covid-19 has injected a new factor into the investment climate, even as many countries around the world continue to wrestle with a new and powerful spread of the virus.  In the US equity market, a rotation, which may have been underway previously, gained ground.  It can be illustrated by the fact that the FAANG-driven NASDAQ trailed the other major benchmarks, including the Russell 2000.  European and Japanese equities extended...

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Markets Remain Unsettled

Overview: Pfizer's vaccine announcement eclipsed the US election as the key market driver.  It spurred the unwinding of Covid trades in terms of sectors and yields.  Emerging market currencies and the majors that benefit from world growth outperformed the perceived safe-havens, like the yen and the Swiss franc.  The euro rose above $1.19 briefly before selling off to trade below $1.18.   Gold collapsed. Yesterday's violent moves may have been an overreaction, but today's action is more...

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