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Corona, Corona, Corona Bonds Really Do Have More Fun!

The equity market finally showed some sensitivity to the effects of the coronavirus (Covid-19) last week with the S&P 500 falling 1.25% from its record high close on Valentine’s day for the holiday shortened week.  The leading issue which dominated every news cycle (except for the Democratic debate for a few hours) was Covid-19 and the economic uncertainties surrounding it.  Markets rose on news or speculation that infection cases were …Read More

Virus’ Total Impact Unknown – But Economic Impacts Are Serious

There were three headlines on Page A6 of the February 6th Wall Street Journal (WSJ): · “Viral Outbreak Squeezes Manufacturers” with the sub-head: “Airbus, Hyundai among multinationals cutting back because of constraints in China;” · Apple Faces Risk In Its Reliance on Chinese Factories;” · Cruise Passengers Quarantined on Board.” We have seen similar headlines since, and will continue to see them while the virus rages. As I write (February …Read More

The Potential Economic Impact Of The Reaction To The Coronavirus

Will You Catch Coronavirus? There is a minuscule chance of contracting the coronavirus if you live anywhere but in Hubei Province in China, and even less of a chance if you live in the U.S. The last time we had something like this (SARS), the public and business reaction wasn’t as extreme. It appears that social media has had a lot to do with this more intense and extreme reaction. SARS infected a …Read More

Holy Cow, Batman – 2! There Really Is Rampant Inflation!

The financial markets have displayed some volatility of late. The latest excuse was the on-shoring of the second case of China’s coronavirus in the U.S. And, no wonder, on a valuation basis, equities are at or near the highs of the dot-com era and similar to October 2018. Remember what happened next? As I’ve written before, equity prices are fueled by excess money creation. That is now well recognized by market commentators, but, we …Read More

Fed Drives S&P 500 To Record Levels, Economic Fundamentals Still Soft

Holiday sales look flat. While online sales were up, sales at traditional retailers were lackluster. Penney’s, Kohl’s, L Brands, Macy’s, Urban Outfitters, Bed Bath & Beyond, all reported lower sales vs. a year ago. Meanwhile, in what looks to be a “frugality” or “trade down” movement on the part of the consumer, same store sales at Walmart, Costco, and Target rose. The Wall Street Journal reported that nearly 40% of exchange listed companies lost money in …Read More

Investor Prospects For 2020 And The Wall Street Casino

This is the time of year when I am supposed to make predictions for markets for 2020, or, at least give an outlook. This has become quite difficult to do in recent times as markets no longer appear to be driven by corporate fundamentals or macroeconomics. Rather, markets have been moved by: 1) passive investment flows; 2) corporate stock buy-backs; 3) TINA (There Is No Alternative), especially for baby boomers looking for …Read More