The coronavirus crisis has reordered expectations and valuations in global markets, but searching for the deepest discounts (based on negative return) delivers a familiar result: the commodities realm continues to offer the darkest shade of red.
Author Archives: James Picerno
Macro Briefing | 21 May 2020
US-China tensions expected to deteriorate ahead of US election: CNBC
Is a 2nd virus wave an economic threat? Maybe not, says Fed’s Bullard: WSJ
Today’s US jobless claims report expected to show 2.4 million rise: Reuters
China imposes limited lockdown after new coronavirus outbreak: WSJ
Eurozone PMI for May: economic contraction eases as lockdowns lift: IHS Markit
Japan’s severe economic contraction continues in May via PMI data: IHS Markit
Highly indebted ‘zombie’ companies at risk in US economy: CNBC
All 50 states are reopening their economies. What happens next? NY Times
S&P 500 rises to highest close since March 5:
Large-Cap Growth Leads US Equity Factors With Gain For 2020
Shares of growth stocks are in a class of their own this year after ticking into positive territory this week for year-to-date performance. The fractional gain through yesterday’s close (May 19) sets this corner of factor investing apart from the rest of the field, which remains in various degrees of loss so far in 2020, based on a set of exchange-traded funds.
Macro Briefing | 20 May 2020
Economic reopenings proceed throughout US and around the world: WSJ
New virus outbreak in China highlights struggle to contain Covid-19: Bloomberg
CBO projects 38% decline in US economic output in Q2: CNBC
Iranian navy says it will continue to operate in Gulf after US warning: Reuters
Taiwan president rejects China’s plan for reunification: Reuters
UK inflation fell in April to slowest pace since 2016: Bloomberg
World trade volumes expected to “fall precipitously” in 1H:2020: WTO
US housing starts fell 30% in April and settled at a 5-year low: CNBC
Profiling S&P 500 Drawdowns Since 1871
Longer is better for analyzing the stock market, which is why Professor Robert Shiller’s data set (with an 1871 starting date) is one of the great free resources on the internet for studying the history of US equities. With that in mind, let’s review how the current drawdown for the S&P 500 compares over the past century and a half.
Macro Briefing | 19 May 2020
Risk managers expect lengthy global recession: Reuters
Signs that recovering Covid-19 patients are no longer infectuous: BBG
Trump considers permanently cutting US funding to World Health Org: WSJ
Moderna reports encouraging results from Covid-19 vaccine test: CNN
Economic expectations in Germany rebound: MW
UK reports record surge in jobless claims in April: MW
US home builder sentiment rebounds slightly in May after sharp drop: CNBC
Commodities Rallied For A Third Week
Broadly defined commodities recovered lost ground last week, marking the third straight weekly gain. Once again, the rise delivered the strongest weekly advance for the major asset classes, based on a set of exchange-traded funds through Friday, May 15.
Macro Briefing | 18 May 2020
Countries focus on China’s initial handling of coronavirus crisis: CNN
China will take “all necessary measures” to new US restrictions on Huawei: AP
Iran warns US against intercepting oil shipment to Venezuela: AP
Fed’s Powell: US economy could fall 30% in second quarter: CNBC
Full economic recovery will require a vaccine, says Fed’s Powell: CNBC
Japan is first major economy to report 2 straight quarterly GDP declines: NYT
US Covid-19 deaths fell on Sun (May 17), close to 7-week low: Johns Hopkins
Industrial output in US declined 11.2% in April — biggest drop on record: MW
US retail spending fell a stunning 16.4% in April: AP
Book Bits | 16 May 2020
Joel Kotkin
Summary via publisher (Encounter Books)
Following a remarkable epoch of greater dispersion of wealth and opportunity, we are inexorably returning towards a more feudal era marked by greater concentration of wealth and property, reduced upward mobility, demographic stagnation, and increased dogmatism. If the last seventy years saw a massive expansion of the middle class, not only in America but in much of the developed world, today that class is declining and a new, more hierarchical society is emerging.
The new class structure resembles that of Medieval times. At the apex of the new order are two classes—a reborn clerical elite, the clerisy, which dominates the upper part of the professional ranks, universities, media and culture, and a new aristocracy led by tech oligarchs with unprecedented wealth and growing control of information. These two classes correspond to the old French First and Second Estates.
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Massive Loss Expected For US Q2 GDP
The US economy is on track to suffer a heavy blow from the coronavirus crisis in the second quarter, according to several GDP nowcasts compiled by CapitalSpectator.com. A hint of the macro loss was previewed in the Q1 data, which reflected 4.8% decline. But new estimates for Q2 point to a far bigger contraction unfolding in this quarter.