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Global equities were mixed last week while U.S. equities slid and bonds appeared solidly entrenched in a down trend. BND, the Vanguard Total Bond Market ETF remained below the 20 day Exponential Moving Average and 50 day Simple Moving Average. Note that short term bonds and high yield bonds were an exception.The coming week is a heavy economic data release week in addition to earnings season. The Congress is fighting over stimulus and there is a presidential election looming. It probably goes without saying at this point, but increased volatility is possible.
Recent excess deaths as measured by the CDC remain relatively flat and have so far failed to follow the COVID infection rate higher. Unfortunately, rt.live paints a bleak picture in regard to COVID infection rates in the U.S. The recent spike in cases is serious and widespread with only 3 states showing an Rt below 1.0. While the prospect of newly imposed lock downs is not the base case scenario, the spike in cases certainly raises the probability of future actions that might restrict the economy.
The theme of winners and losers continues. The near term spike in cases may further drive a wedge between winners and losers.
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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