Market Notebook


Global equities moved sharply higher while bonds were mixed with high yield moving higher and less risky issues slumping lower. BND, the Vanguard Total Bond Market ETF remained solidly below the 20 day Exponential Moving Average and 50 day Simple Moving Average and broke below recent channel lows. The break of the channel lows suggests further declines are a distinct possibility. In the high yield space, it is surprising that prices have moved sharply higher in recent days as buyers appear to be looking past potential credit quality issues.

Somewhat of a multi-week repeat, but excess deaths as measured by the CDC continue carve out a relatively normal distribution. From the week of September 12th to present, the distribution of excess deaths appears to be flattening into the tail area of the distribution. Total deaths from all causes appear to be very close to historical norms. This could mean the virus has reached a relatively steady state as we work through the tail of the distribution or it could represent a flattening prior to a new upswing. During the last week, infection rates as measured by remained stubbornly high.

The theme of winners and losers continues. Opportunities are available in this market depending on risk tolerance. Unfortunately, much of the opportunity made available by the recent pullback in equities has dissipated as prices generally moved higher during the last week.

Link to the CDC data:

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– Best

Cory Haupt

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