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).

continue reading at The ETF Portfolio Strategist

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.

Continue reading →

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

Citigroup analysts say the probability is rising for a recovery in the value risk factor, which has trailed the equivalent for growth stocks in recent years. It’s anyone’s guess if they’re right. The market gods are consistently shy about revealing such insights in advance. Perhaps, then, it’s no surprise that many forecasts in recent years have argued that value is on the cusp of a rebound only to see the relentless dominance in growth persist. But maybe it’s different this time.

Continue reading →

Half of Americans say they would be reluctant to take new Covid-19 vaccine: WSJ
Europe battling resurgent coronavirus infections: CNBC
Thailand bans large gatherings amid pro-democracy protests: CNN
China’s consumer inflation eases to slowest in 19 months: Reuters
Record demand for China’s first direct bond offering to US investors: FT
Global oil demand expected to peak in 2030, Int’l Energy Agency predicts: MW
Mexican farmers attack soliders, seize dam in battle over US-directed water: NYT
Wall St trading boosts bank earnings as Main St operations stumble: NYT
Will long-suffering value stocks shine after election? Yes, predicts Citigroup: BBG

Calm Before The Storm? The markets continue to churn but most of the major asset classes continue to go nowhere fast. Surprising? Not really. With the US election less than a month away the markets seem to be holding their collective breath and ponder what may lie in wait on the other side. That starts with the obvious: Who will be president? A worthy question, but that’s just the opening bid.

continue reading at The ETF Portfolio Strategist

The energy sector is a critical part of the US and global economy and this slice of global markets deserves a spot at the asset allocation table. But as an investment it’s been a disappointment in recent years… or has it?

Continue reading →

Eli Lilly’s Covid-19 antibody trial on hold due to safety concerns: SN
Supreme Court rules census counting can end before Oct. 31: CNBC
IMF cuts outlook for global growth in 2021: CNN
JPMorgan, Citigroup: US economic rebound continues to face risks: WSJ
Debate over the relevance of the equity size factor is heating up: II
China’s stock market value rises to record high of $10 trillion: FT
US’s weakest local economies face dire outlook in pandemic: Reuters
Eurozone industrial output continued to rise in Aug but at much slower pace: MW
US small business optimism continued to rebound in Sep: NFIB
US core consumer inflation’s 1-year change holds at moderate 1.7% for Sep: LD

All the US equity sectors have bounced off the Mar. 23 broad-market low, with consumer discretionary shares leading the way, based on a set of exchange traded funds through yesterday’s close (Oct. 12). Technology is a close second. On both fronts, the rallies have carried prices well above the broad market’s recovery since the depth of the coronavirus crash in late-March.

Continue reading →

J&J halts Covid-19 vaccine trial due to unexplained illness in participant: SN
Democrats and GOP clash in start of Senate hearing on Barrett: FTE
Contracting Covid-19 a second time is a risk, new study finds: BBG
Drug makers eye the potential for big profits with Covid-19 vaccines: NYT
White House moves forward with arms sales to Taiwan: Reuters
Central banks have moved aggressively this year to finance fiscal spending: BBG
Wall St is looking for the upside in a ‘Blue Wave’: II
UK job cuts rose the most on record for three months through Aug: BBG
German investor sentiment falls more than expected in October: Reuters
Most big economies will struggle to regain this year’s losses in 2021: BBG