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Latest UVA News Posts

Good News! The Re-Opening

The Unemployment Picture The equity markets continued their uptrend the week ended May 30th with the S&P 500 gaining 3.0% for the week (and 4.5% for the month). Similarly, the DJIA gained 3.8% this past week and 4.3% for the month. Markets moved higher on vaccine speculation, and on less negative sequential data as all 50 states were in full or partial re-opening mode. The markets seem to believe that the Recovery will be …Read More

What Normal Could Look Like

The economy of the future will feature more consumer savings, and business balance sheet repair (more cash, more cost, lower profits, and deferred capital expenditures).  After an initial spike up likely starting in June and continuing into Q3, growth will be difficult.  Unemployment, after spiking to the mid-20% range, will come down slowly, remaining in double digits for 2020 and perhaps getting below 10% in 2022. Inflation Inflation is coming, …Read More

A Commonsense View Of The Shape Of The Recovery

Because economies are reopening or partially opening in the U.S., the likely bottom of the Pandemic Recession will be this quarter. The debate is now over the shape of the Recovery. Letters have been used to describe what authors/economists/investment houses believe. “V” shaped is clearly what the equity bulls believe. Some describe it as a “U.” A “W” would occur if we had a second virus wave. Still others believe we will have an “L” shaped …Read More

On Reopening: We’ve Just Seen The Iceberg’s Tip

New Data Should Accelerate Re-Opening When the pandemic started, the only data available was the number of new cases, existing cases, and deaths. The original models, perhaps based on prior pandemics like the Spanish Flu of 1918, forecast significant deaths, up to as many as 2 million in the U.S., and, of course, mass infections. Based on that, governments all over the world shut-down their economies. New mortality data is now available …Read More

On Gazing Into The Abyss

The six large cap stocks (FB, AAPL, AMZN, GOOGL, NFLX, and MSFT), which now compose 22% of the S&P 500 (vs. 10% five years ago) are, amazingly, up about 4% YTD as of Friday April 17. The S&P 500, itself, closed Friday, down only -11% YTD (and only -15% below its all-time peak), even in the face of the most severe Recession (Depression?) since the 1930s. And, Wall Street is raving that …Read More

The Shape Of Things To Come: ‘V’ Or ‘L’ Recovery

What do -38%, -34%, -30%, and -25% have in common? If you guessed that these are the Q2 real GDP forecasts from the major financial houses (Morgan Stanley, Goldman Sachs, Bank of America, JPMorgan), you would be correct. Incredible as it may seem, we are likely headed for a drop in Q2 real GDP in that magnitude, and the just passed Q1 quarter looks to be somewhere near high negative single digits. …Read More