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Market “fragility” was on display last week as global equities moved sharply lower while the bond complex largely consolidated.
Recovery in the real economy continues at a slow pace.
Corona virus infection rates as measured by rt.live remained stagnant from two weeks ago suggesting that infections are not slowing as much as we would like. On a positive note, excess deaths as measured by the CDC appear to continue to decline in a manner best described by a normal distribution. It seems likely that infections will hold steady or spike as schools and universities open. Excess deaths may continue to decline if new infections are indeed centered within a younger than average population.
Expect continued volatility during the coming week. It will be interesting to see if the “buy the dip” crowd wins the battle or if equity prices will continue lower. In last week’s notebook it was mentioned that portfolio rebalancing should be considered. Although equity prices pulled back, portfolio rebalancing may still be valid if the opportunity to rebalance last week was missed.
Link to the CDC data: https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm#dashboard
Bookmark this COVID-19 site. https://rt.live
Best
Cory Haupt
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