2020 has been the year of the “unprecedented.” Even the word “unprecedented” is receiving unprecedented use in Google searches. The coronacrisis resulted in a recession so short, and so deep, that even though all its consequences have yet to play out, it seems likely to be very different from any Read more
Many forces are at work that could result in a correction for U.S. markets: uncertainty around the trajectory of the pandemic; the worrisome prospect of a contested presidential election; and typical seasonal weakness. And yet, as we write, the S&P 500 remains near an all-time high. Why? The investment backdrop Read more
Mr McGuire’s one word of advice to Benjamin Bratton in The Graduate — “plastics” — may have been a good career move in 1967, but in 2020 it needs updating, hence our title above. Finding Election-Agnostic Themes As the U.S. gets closer to a divisive election, with binary outcomes possible Read more
Markets continue with sideways volatility as the election gets closer. Given the level of uncertainty that surrounds both the election itself and the prospect of a confused and uncertain outcome that lasts for weeks, it isn’t surprising that marginal investment dollars would sit it out, waiting for clarity. We know Read more
The recession caused by the pandemic lockdowns has led to astronomical spending increases by the Federal government, and the monetization of a torrent of newly created debt by the Federal Reserve. This coordinated monetary and fiscal response sets the current crisis policy apart from what followed the Great Financial Crisis Read more
The great debate is on: inflation or deflation? Which will win out, the massive fiscal and monetary impulse coming from the Federal stimulus measures and the huge Fed-fueled growth in the money supply? Or the sharp contraction in spending resulting from the lockdown, with all its knock-on effects? Much hangs Read more
With the unedifying spectacle of the first Presidential debate behind us, and the election just over a month away, we believe markets are continuing to shift into a mode driven more by politics than by the pandemic. Daily new U.S. confirmed cases and deaths are at the same levels as Read more
The news cycle is still partly occupied with COVID-related coverage, and thus the markets will likely still respond to reports of rising cases, and advances and setbacks in vaccine trials. (We note that daily deaths are declining again in the U.S., and in some European countries have fallen to single Read more
Market attention is shifting from coronavirus to elections as November gets closer and campaigning heats up. News coverage is already reflecting concerns that an unclear result on Election Day could lead to weeks of contention and uncertainty, and we all know how little Mr Market cares for that. Many investors, Read more
COVID in the U.S. remains under control, and tracking down, despite an uptick in fatalities perhaps related to delayed reporting from the recent holiday weekend: The buoyant recovery of U.S. stock markets after March’s lockdown lows has been driven by abundant liquidity from the financial authorities, and robust spending support Read more
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