Displaying items by tag: recovery

(New York)

You know the saying “a rising tide lifts all boats”? It couldn’t be further from the truth as it concerns the current stock market. The S&P 500 is just about flat, yet if you take a close look, 337 of its component stocks are down. The index is only being held up by a 1% gain from Apple and minor gains from the other 4 stocks that comprise 20% of its entire value. The lack of breadth has been a consistent feature of the recovery over the last several months.


FINSUM: Investors are not expressing any degree of bullishness about the economy, which would be reflected in breadth. Frankly, all the recent gains seem to be simple momentum bets on a small handful of stocks, making the whole recovery feel hollow.

Published in Eq: Total Market
Monday, 27 July 2020 14:46

New Stimulus Package Appears Close

(Washington)

Republicans are supposed to debut their new stimulus package today—after a long wait that neither side was happy about—but the details are still unclear. Some prominent party members hinted at details of the proposal on CNN yesterday. So far, it looks like enhanced unemployment benefits will be continued, but at a lower amount, an eviction moratorium would be extended, and direct $1,200 payments may continue for a subset of Americans. Republicans say they want to negotiate a stop-gap deal while a larger package is hashed out. House speaker Pelosi wants the full package negotiated now.


FINSUM: Given the length of time it may take to hash out a complete new deal, millions of Americans would probably be happy if a basic short-term package was agreed ASAP.

Published in Eq: Total Market
Friday, 17 July 2020 16:39

Jobs Market Looking Weaker

(New York)

Some bad news on the jobs market emerged this week. In the weekly data, another 1.3m Americans applied for unemployment assistance. That number has stayed steady for weeks and shows no signs of abating. But it is other contextual info that makes that number worse. For instance, job openings are now declining, with total numbers in July down versus June. Growth in worker hours is also waning after growing for several weeks. Finally, google searches for “file for unemployment” are growing.


FINSUM: When you take all this together, a comprehensive picture is starting to show. It appears that the rising COVID cases may now be seriously putting a halt on the recovery.

Published in Eq: Total Market
Thursday, 16 July 2020 16:42

Another Big Stimulus Package is Days Away

(Washington)

Investors are wondering how we are going to escape this exhaustingly choppy market. Markets are fighting higher generally, but it seems like 2 steps forward, 1.9 steps back. So how we will we break out of this mode? The answer might be another $1 tn+ stimulus package from the government. Some are skeptical this will happen because many believe Demcorats in the House don’t want another package because it might help Trump’s chances. That seems to be short-sighted analysis, as Democrats need another package to help avoid layoffs in key states they want to win, which could jeopardize their odds. Republicans want more stimulus to aid in their various reelection bids.


FINSUM: Both sides want a package. The big issue seems to be the continuation and size of expanded unemployment aid. Rumor is a deal might come before July 31st.

Published in Eq: Total Market
Thursday, 16 July 2020 16:41

Promising Vaccine Study Giving Hope to Markets

(New York)

Markets were up big yesterday. Most of the reason why seemed to be some great indications from an ongoing COVID vaccine study. Moderna seems to have reached a breakthrough in its COVID vaccine trials, and the promising results ensured a bigger study at the end of this month. All stocks that are considered COVID-sensitive, such as airlines and cruise lines, rose on the news. According to Invesco, “The way it’s looking at the moment, it really looks as though a vaccine is the only hope. This thing is not going away”.


FINSUM: That Invesco quote is sad, but appears entirely accurate. COVID does not seem to be fading whatsoever on its own, so a vaccine is the only thing that is going to return the world, including markets and the economy, to normal.

Published in Eq: Total Market
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