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U.S. equities made new highs while bonds ex high yield, retreated last week.
In the short to medium term, market participants are likely to be interested in the strength of the real economic recovery globally. Will the recovery continue at a swift pace or will that pace moderate. Equities appear priced for a rather swift economic recovery.
In the bond space, the concern appears to be that fiscal stimulus in the U.S. could lead to inflation. This was a concern post 2008, yet accelerated inflation never occurred. During the last week bonds appeared to struggle. If participants remain concerned about inflation, bonds could continue to struggle.
In regard to individual companies, will some of the structural changes cause by COVID be permanent? It certainly seems like the answer will be yes. Consumers are growing accustomed to Amazon Prime delivery, take out, and social distancing. Work from home is certain to be much more acceptable to a range of companies. These types of changes will create winners and losers.
Data from the web site RT.live are showing improvement in COVID infection rates. Ten states continue to have an RT below 1.0. Recent excess deaths as measured by the CDC appear to be trending higher.
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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