Daily Archives: Oct 16, 2020 at 07:06 pm EDT

The ETF Portfolio Strategist: 16 Oct 2020

No Way But Up? The US stock market continued to confound the bears as shares rose for a third week. Vanguard Total US Stock Market (VTI) posted a thin gain—a slim 0.1% advance for the trading week through today’s close (Oct. 16), but that was enough to lift the fund to a record close based on week-end numbers. (On a daily basis, VTI is 1.6% below its record Sep. 2 close).

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Research Review | 16 October 2020 | Index Investing

Does Joining the S&P 500 Index Hurt Firms?
Benjamin Bennett (Tulane University), et al.
July 20, 2020
We investigate the impact on firms of joining the S&P 500 index from 1997 to 2017. We find that the positive announcement effect on the stock price of index inclusion has disappeared and the long-run impact of index inclusion has become negative. Inclusion worsens stock price informativeness and some aspects of governance. Compensation, investment, and financial policies change with index inclusion. For instance, payout policies of firms joining the index become more similar to the policies of their index peers. ROA falls following inclusion. There is no evidence of an impact of inclusion on competition.

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Macro Briefing: 16 October 2020

World Bank chief economist: pandemic is turning into major economic crisis: BBG
Global study of remdesivir finds drug doesn’t prevent Covid-19 deaths: CNN
Harris cancels trips after positive Covid-19 for 2 people linked to campaign: USAT
Fatigue, colder weather, lax restrictions are factors in US Covid-19 rebound: WSJ
Record 17 million Americans have cast early votes to date: AP
Veteran investor Mark Mobius sees big risk for markets in US election: CNBC
Philly Fed Mfg Index: growth accelerates in October: PF
NY Fed Mfg Index: expansion slows in October: NYF
US jobless claims rose last week, highest since mid-Aug: CNBC