Displaying items by tag: covid

(Washington)

Markets are having a tough time right now on news of surging cases across many parts of the US. In what has become a typical cycle, optimism on the recovery is being tempered by media reports of surging COVID cases in several states. The markets seem to be unusually wounded this morning, and the reason might be comments from Coronavirus Task Force chief Anthony Fauci. Speaking about the rise in cases, he called it a “disturbing surge” and warned congress that the virus was not under control.

FINSUM: The rise in cases in Florida, Texas, California, and Arizona has been alarming, especially in the last week, so markets are starting to worry about the potential for new lockdowns.

(New York)

It might be obvious if you are paying close attention to the stock market, but today we are covering a list of the top performing stock/companies during COVID. Most of the names are what you would expect, but there are a few surprises. No one would be surprised to see Amazon and Microsoft atop the list, with Tesla, Facebook, and Alphabet all in the top ten, but how about PayPal and Shopify (numbers 9 and 15 respectively). Zoom is also in the top 15, but Audi and Home Depot are also in the top 25. Salesforce is number 33.

FINSUM: Certain companies have boomed under COVID for a variety of reasons, and looking at a consolidated list is a great way to get a perspective on what is performing well.

(New York)

Morgan Stanley made a bold call this week. Their research team has officially adopted what seems like a fairly risky position on the economic recovery: they are saying it will be of the much sought after v-shape. The bank has been calling for a short and sharp recession for some time, but this is the most optimistic outlook they have published. According to Morgan Stanley’s chief economist, “Recent upside surprises in the incoming growth data and policy action have increased our confidence that this will be a deep V-shaped recession”.

FINSUM: We still don’t think this is going to be a v-shaped recovery. More like a U-shape or more likely a Nike swoosh shape. The depth of firings combined with the probable corresponding slow pace of consumer spending will hold back the pace of the recovery.

(New York)

Evercore put out an interesting prediction today. The bank, which has a strong research team, says that the market is likely to be “violent” in the near term. They also added a twist—that it would be “violently flat”, meaning it would have sharps up and downs on but the whole remain around the same levels. Evercore highlights the upsides and risks this way, saying “A significant COVID second wave would continue to drive asset prices lower, but with vaccine development continuing, little correlation between economic re-openings and increased case growth and hospitalization data at the national level”. That said, longer term, they are quite bullish, arguing that there will be a “sharp rebound”.

FINSUM: The news flow is going to mean that stocks are very volatile for the foreseeable future. Increased case growth one day, and then a big jump in retail sales the next.

(New York)

If you are upset about the market’s mini-correction last week, don’t worry, it is going to fall more, says Morgan Stanley. In what comes across as almost an insult to regular investors, Morgan Stanley’s research team says stocks may fall another 7% from opening levels today, but that such a fall was “healthy”. On the whole, Morgan Stanley’s position was positive, saying “We maintain our positive view for U.S. equity markets because it’s early in a new economic cycle and bull market. Last week’s correction was overdue and likely has another 5-7% downside. It’s healthy and we are buyers into weakness with a small/mid-cap and cyclical tilt”.

FINSUM: We have definitely entered a new economic cycle, and with it, perhaps a new market cycle. However, the pace with which stocks came back makes one worry the market cycle has not actually reset itself.