Guild’s Basic Needs Index
Working From Home — Flash In the Pan, Or Lasting Theme?
Near the height of pandemic lockdowns and workplace closures, on April 20, 52% of American workers were working from home, according to Morgan Stanley Research. But the work-from-home trend has been rising over the past two decades as internet connectivity, real estate costs, and the desire for better work-life balance
Market Summary — 9 July 2020
Earnings calls will include a lot of information about the bounce back in business activity, which will vary greatly from industry to industry. We will be listening to many calls of interest in order to gain insight into these dynamics as closely to real-time as we can manage. November’s elections
Some Likely Winners In the Post-Covid World (Part Two: Healthcare Transformation)
As we noted last week, some of the social and economic changes wrought by the covid pandemic will be enduring and not just transitory. Many companies well-positioned to benefit from these new or newly strengthened themes have seen their stocks outperform in the year so far, and although volatility certainly
Market Summary — 2 July 2020
Robinhood Earlier this year, just before the pandemic broke, Bloomberg Businessweek featured a cover story about r/WallStreetBets, a bulletin board on the Reddit news aggregator populated by young traders with Gen Z attitudes — boasting ironically as much about their failures as their successes, churning out an endless stream of
Some Likely Winners In the Post-Covid World (Part One: E-Commerce and Fintech)
Since the pandemic broke, it’s been apparent to us — as it has to many other investors — that the virus would bring significant social and economic change in its wake. The post-covid world would be different from the pre-covid world, and those changes would benefit some sectors, industries, and
Market Summary — 25 June 2020
Most of our thoughts about the overall market landscape are contained in this week’s headline piece. Obviously, the market is rewarding perceived beneficiaries of covid-related changes, and punishing companies that are believed to be challenged by them. This week we discussed some of the tech beneficiaries, especially in the e-commerce
Reasons For Second Wave Skepticism
Two weeks ago, the worst single-day decline since March was blamed in part on emerging signs of a second wave of coronavirus illness in some reopening states, particularly Florida, Arizona, and Texas. That nervousness in turn raised fears that in some locations, authorities might need to re-institute lockdowns or tighten
Why We’re Not Worried About Inflation… Yet
Two weeks ago, we briefly mentioned the worry some investors have that the Fed’s response to the coronacrisis could result in uncontrollable inflation, or even hyperinflation. At first blush, the expansion of M2 visible since the Fed’s crisis stimulus seems to justify the concern: However, while the broad money supply
Market Summary — 11 June 2020
Time To Look To Cyclicals? Much of the heavy lifting in the markets’ breathless recovery from March’s lows has been performed by the mega-cap growth companies such as Microsoft [NASDAQ: MSFT], Facebook [NASDAQ: FB], Apple [NASDAQ: AAPL], Amazon [NASDAQ: AMZN], and Alphabet [NASDAQ: GOOG]. We believe that the overall
Yield Curve Control: Coming Soon To a Fed Near You
Even as the recovery of stock markets from the March and April decline continues and broadens, investors’ attention remains focused on Federal Reserve policy. As we described last week, Fed policy has been instrumental in preserving financial stability, not only in the U.S., but globally. With the initial crisis past,
Market Summary — 4 June 2020
The U.S. economy is reopening across many states: While after the sharp snapback rally, a 5 or 10% market correction in June or July remains a distinct possibility, we believe that monetary and fiscal support have taken many “worst case” scenarios off the table. Last week we mentioned data from
The Fed Can’t Stop Foreigners’ Addiction to Dollars
Since March, unprecedented monetary and fiscal support for the U.S. economy has rolled out in waves from the Federal Reserve and from the U.S. government. Fed Chair Jerome Powell’s determination to do “whatever it takes” to ensure the stability of the U.S. financial system, and to avert a financial crisis,
Market Summary — 28 May 2020
In the past month, the aggressive growth industries — primarily tech hardware and software, internet, cloud, cybersecurity, and biopharma — saw their stocks rebound and move ahead, dramatically outpacing the rest of the market. The rally from the pandemic bottom was thus rather narrowly based, with technology megacaps responsible for
Europe: Back From the Brink
Often in the years since the European sovereign debt crisis, we’ve noted that the European banking system has remained a weak link in the global financial system. In our view, this trouble spot was a likely epicenter of a future crisis. The coronavirus pandemic looked like it could have been
Market Summary — 21 May 2020
The United States Perhaps the most important Federal Reserve actions in response to the crisis have been the establishment of facilities to support corporate credit – by buying both investment-grade debt, and the debt of “fallen angel” corporates driven into junk status by the effects of the pandemic. That announced
India: Manufacturing Destination
Last week we reported about two large stakes taken in Indian telecom giant Reliance Jio by U.S. investors. Their interest focused particularly on the Indian consumer, one of the world’s great untapped consumer markets. Jio’s aggressive rollout of cheap internet service and mobile devices to currently unconnected Indians attracted a
