Our President’s Comments

07/02/20

Internal Markets Commentary

In the latest FOMC Minutes released earlier today, the Fed made it clear that contrary to near-consensus expectations that Powell would usher in some form of Yield Curve Control around the September meeting (if not sooner), such a move is unlikely to take place in the near future as Fed officials had “many questions” about the benefits of yield-curve control when they discussed its pros and cons at the latest Fed meeting, even as the Fed reiterated that it would keep rates at zero and continue to buy bonds “for many years.” And while stocks barely reacted to the Fed’s surprising talk back of YCC, perhaps because algorithm subroutines weren’t sufficiently clear, the fact that the Fed may be content with leaving things as is indefinitely, is a very worrisome development to none other than the most important bank in the world, JPMorgan.

07/01/20

Internal Markets Commentary

The Virus Outlook

  • The virus has become progressively less deadly since its original US outbreak in February and March. This is primarily due to medical professionals’ better understanding of the pathogen and how to treat it.

06/30/20

Internal Markets Commentary

The Pandemic and its effect on the Markets

  • The S&P 500 Index ($SPX) on Monday closed up +1.47%, the Dow Jones Industrials Index ($DOWI) closed up +2.32%, and the Nasdaq 100 Index ($IUXX) closed up +1.14%. U.S. stock indexes on Monday moved higher throughout the day on better-than-expected U.S. economic data, along with the prospects for additional global stimulus measures. The stock market was able to shake off concerns of the resurgence of the global coronavirus pandemic.

06/29/20

Internal Markets Commentary

Markets Recap and the Coronavirus Effect

  • Treasury yields dropped moderately over the course of the week as coronavirus fears led investors to a more risk-off approach. States across the southern part of the United States, including Texas, Florida, Arizona and California, reported record numbers of new cases at some point during the week, leading several states to implement new lockdowns or pausing their states opening plans.

02/25/20

Internal Markets Commentary

The Coronavirus Effect

  • The contagiousness of the virus is similar to flu (maybe a touch worse) but with the mortality rate anywhere between 2 and 20 times as high. Flu has a mortality rate of 0.2% with COVID-19 cited at anywhere between 0.4 and 4. The often quoted 2.5-3% mortality rate might be overstated due to a likely understatement of cases as many people in China with relatively mild symptoms may not have been tested. New information is that we now know people are contagious before they show symptoms. This makes containment very difficult. As such the reports over the weekend of the surge in cases in Italy are a potential game changer. It now is unlikely that Italy will be the only sizeable European outbreak. Given the nature of the way governments will balance the risk/rewards, this could easily lead to widespread travel restrictions a

02/21/20

Internal Markets Commentary

The State of the Markets

  • After a brief but sizable risk off move yesterday that saw the S&P 500 move from positive territory to down more than a percent in the last half hour of European trading, today’s flash PMIs will be an important measure of how activity is shaping up in February in the heat of the Coronavirus crisis and shut downs.
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