Second Quarter GDP Reflects Early Pandemic Response
The U.S. economy contracted 9.5% through the second quarter, the worst single-quarter decline in gross domestic product (GDP) since the Commerce Department started tracking it in 1947. It was expected the report would show a dip, but it’s important to recognize what that dip represents.
Income Fund Update: Focused on Finding Opportunities in Today’s Markets
Looking across the global opportunity set, we see potential for attractive yield, though uncertainties surrounding the global recovery suggest this is a time to be cautious.
Economic Normality: When? Sooner? Never?
In the time since COVID-19 hit the economy and stock market, there has been three phases. First, the question was ‘when’ will the economy return to pre-COVID normal? Next came ‘sooner or later’? Recently, we have moved to ‘will the economy ever come back’? For long-duration investors like us, what are the investment implications in where we are now in a U.S. stock market with many securities priced for ‘never’?
US Recovery: Cautiously Optimistic - More of a "✓" Than a "V"
We have upgraded our near-term economic outlook on the US economy, as some encouraging economic data has come out recently. However, the ongoing COVID-19 crisis, including recent spikes in cases throughout the country, ongoing social distancing measures, international and domestic tensions, and the threat of a return of lockdowns means investors should not get too complacent.
The GDP Arithmetic
Real GDP was reported to have fallen at a 32.9% annual rate in 2Q20. Nobody should have been surprised by that. Component data had already indicated massive and broad-based weakness and most economists’ estimates fell in the -30% to -35% range. News reports had generally implied that the downturn was ongoing. That’s clearly not that case...
Capturing the Ups and Downs in Coronavirus Equity Markets
Several equity factors diverged significantly from their typical performance patterns during the COVID-19 crisis. By understanding how factor returns behaved in this market correction relative to their historic norms, investors can not only prepare for future volatility but also take advantage of short-term market dislocations.
Universal Basic Income Is Not An Economic Savior
According to a new study by the left-leaning Roosevelt Institute, a universal basic income could permanently make U.S. economy trillions of dollars larger. While such socialistic policies sound great in theory, history, and data, show it isn’t the economic savior it is touted to be.