COVID-19: Coronavirus Coverage

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Donald Trump departs Washington on Wednesday with Americans more politically divided and more likely to be out of work than when he arrived, while awaiting trial for his second impeachment -- an ignominious end to one of the most turbulent presidencies in American history.

Janet Yellen encountered early Republican resistance to President-elect Joe Biden’s $1.9 trillion Covid-19 relief plan in her confirmation hearing to become Treasury secretary Tuesday, as she sought backing for what she described as vital support for the economy.

Despite seeing major market swings following the 2016 Brexit referendum, we don’t expect Britain’s departure from the European Union (EU) to have any major economic effects in our baseline outlook for 2021 and beyond. Far more important are COVID-19, fiscal policy, and bigger questions around future productivity growth.

This enormous stimulus plan will have numerous effects on the economy, including the likely loss of millions of jobs, which the media doesn’t report, so that’s what we’ll talk about today.

The double-dip recession so many feared didn't arrive in the fourth quarter of 2020, and it certainly doesn't look like it will happen in early 2021, either.

The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 83 is down 3 from last month's 86.

The new year kicked off with a sharp rise in Treasury bond yields, despite unprecedented political turmoil and signs that the economic recovery is slowing.

Judging by recent phone calls and email queries, inflation is a serious concern among investors this year.

A confluence of dynamics are set to accelerate global capital flows to emerging markets amid attractive valuations.

Emerging-market stocks rebounded in 2020 even as the COVID-19 pandemic spread globally. As vaccines and other favorable conditions unfold, investors have good reasons to consider EM equities in 2021 while strategically considering their potential risks.

With Democrats set to effectively control the White House and Congress, economists are betting that another significant jolt of fiscal support will boost economic growth this year.

U.S. Treasury Secretary nominee Janet Yellen on Tuesday steps into a new role following more than a quarter-century in government: salesperson for economic policy after years of defending Federal Reserve thinking and actions.

The economic news has continued to soften in recent days. December saw layoffs go up and the number of jobs decline, and, this morning, the retail sales numbers dropped. Consumer confidence has gone down. Clearly, the economic headwinds from the pandemic are getting worse.

Rescues by the Federal Reserve and aggressive monetary policies have helped stock and bond investors, but the degree of money printing will be paid for by future generations.

Every January, I start keeping track of the predictions for the upcoming year I hear in the financial media and from advisors and investors. With the arrival of 2021, it’s time for my final review of how the 2020 forecasts played out.

Today we’ll begin by looking at new virus developments, some of which are good, some very good, and some frightening. We (the entire world) are in a very tight race with dire consequences if we lose.

Founding Father Benjamin Franklin said it best: “They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.” In this light, what are we to make of Trump’s social media suspension?

Month-over-month nominal sales in December decreased by 0.68%. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, decreased by 1.05%. 

U.S. stocks have continued to climb amid optimism about a vaccine-led economic recovery, but it’s a narrow path—buoyant investor sentiment could easily be deflated by bad news. Although global economic growth has struggled, an acceleration in vaccinations in major countries could support stronger growth in the second quarter.

A brief monthly update on what's happening in the municipal bond market.

Our K2 Advisors team is optimistic about the opportunity set in the year ahead, and thinks that active management alpha will be key to success in 2021. Brooks Ritchey and Robert Christian provide the team’s first-quarter hedge-fund strategy outlook.

This week investors learned of president-elect Joe Biden’s initial bid for the next round of covid-19 relief. The number came in at $1.9tn. Importantly, included in this figure is mainly covid relief as opposed to a longer-term fiscal package that will be heavily weighted to infrastructure.

The Loomis Sayles Investment Grade Sector Team answers three questions on their outlook for 2021.

The forceful rise of the markets from March depths continued in the fourth quarter. After stalling out in early Fall, market participants floored the accelerator in November with vaccine approval in tow and the election overhang in the rearview.

Reasonable people can argue about whether the broader stock market is overheating. But in certain corners of the equity universe where tiny investors dominate, it’s hard to say everything is going normally.

President-elect Joe Biden’s $1.9 trillion Covid-19 relief plan is designed to both pump money into the economy and contain the coronavirus pandemic.

The Census Bureau's Advance Retail Sales Report for December was released this morning. Headline sales came in at -0.7% month-over-month to one decimal and was below the Investing.com forecast of -0.2%. Core sales (ex Autos) came in at -1.4% MoM.

This morning's release of the November Producer Price Index (PPI) for Final Demand was at 0.1% month-over-month seasonally adjusted, down from a 0.3% increase last month. It is at 0.8% year-over-year, up from 0.5% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.1% MoM, unchanged from the previous month and is up 1.4% YoY NSA. Investing.com MoM consensus forecasts were for 0.2% headline and 0.2% core.

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 3.5 was a decrease of 1.4 from the previous month's 4.9. The Investing.com forecast was for a reading of 6.0.

We’ve distilled our economists’ 2021 projections for the global economy into a quick 4-page summary. Get concise details on our expectations for the coming year, including:

• Global investment-return expectations.
• The potential unevenness of the recovery path.
• Lasting effects from the pandemic.

We've updated this series to include the December release of the Consumer Price Index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $42,904, down 5.8% from 45-plus years ago.

It has been an extraordinary start to 2021 in the nation's capital. The images of a mob protesting the outcome of the presidential election by overrunning the U.S. Capitol building on January 6^th are already seared into the nation’s collective memory. A week later, the House of Representatives, for the first time in American history, impeached a president for a second time.

Municipal bond issuers’ financial health and resiliency—which helped in 2020—should support opportunities for active muni investors in 2021.

John Bell shares his thoughts on yields, defaults and the role of CLOs in the loan market in 2021.

Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months. Also included are the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation. We can make some inferences about how inflation is impacting our personal expenses depending on our relative exposure to the individual components.

House Speaker Nancy Pelosi is seeking to impose fines of as much as $10,000 for representatives who violate new security screening rules. Oklahoma lawmakers and their staffs are being told to stay away from the state capitol building in Oklahoma City over potential protests. Washington is temporarily shutting some subway stations near the Capitol to deter travel while security is on high alert.

The surge of U.S. business formations in the back half of 2020 has been one of the pandemic’s many surprises.

Federal Reserve officials are beginning to split over when they may need to start pulling back on their massive monetary stimulus, drawing nervous glances from investors who remember how markets were roiled during the 2013 taper tantrum.

The pandemic housing market rally, a bright spot for the U.S. economy, may already have peaked as the growth in home prices starts to slow.

America’s population is growing at the slowest rate since World War II, threatening to undermine demand and investment in the economy, according to a new blog post from the St. Louis Federal Reserve.

We've updated our monthly workforce analysis to include last Friday's Employment Report for December. The unemployment rate remained at 6.7%, and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) came in at -140K.

Small-cap US stocks rebounded sharply in the fourth quarter. Yet the recovery may still be in its early stages—particularly for smaller-cap value stocks—as pandemic risks recede and earnings drivers kick in during 2021.

Equity markets continued a torrid run in the fourth quarter, propelling nearly all sectors and asset classes back into the black for 2020. But Q4 was defined by a notable shift in market leadership as cyclical sectors and asset classes bested defensives and growth stocks.

Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.

In the fourth quarter of 2020 the November 9 Covid-19 vaccine data prompted a shift in the market on that day, as the cards were turned over on Pfizer’s/BioNtech’s candidate. The positive efficacy data led to a strong rally in lowly-valued stocks and shares of companies that had been negatively affected by the pandemic.

Over the holidays, I spent a lot of time reading forecasts for 2021 from leading economists, big banks, think tanks and other so-called experts. Coming off one of the most volatile economic years in history due to the coronavirus pandemic, I was very interested to see what forecasters were predicting for the New Year.

Loomis Sayles' Global Credit Sector Team shares their outlook on key themes in the euro credit space.

The Bureau of Labor Statistics released the December Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 1.36%, up from 1.17% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.62%, down from 1.65% the previous month and below the Fed's 2% PCE target.

Last week was shocking and extraordinarily sad; and as if Americans didn’t have enough with which to contend, it was capped off by a weaker-than-expected December jobs report.

Credit markets have staged an epic rebound from the depths of March 2020. But in a low-growth, low-yield world, we believe there may be more room to run in 2021.

The US state of Georgia held January runoff elections that determined two Democrats as their US senators, giving the Democratic Party control of the legislative and executive branches through 2022.

The latest monthly employment report showed a gain of 245K nonfarm jobs, which consists of a gain of 190K service-providing jobs and a gain of 55K goods-producing jobs.

Economic snapback to fuel global growth. We have a very optimistic outlook for 2021, with above-consensus GDP calls around the globe.

The Loomis Sayles Emerging Markets Debt Sector Team shares their views on corporate spreads, foreign exchange and leverage in 2021.

The seemingly endless election of 2020 is finally over, with Democrats winning both Senate seats in Georgia.

While valuations are high across the market, on a relative basis, they are still most attractive for international stocks. The pandemic has delivered a global growth shock, but in doing so, it has accelerated the timeline for mega trends such as productivity enhancement (robotics, automation, and software), e-commerce, electronic payments, and rapid drug development.

The latest JOLTS report (Job Openings and Labor Turnover Summary), with data through November, is now available.

Wall Street strategists are going all-in on reflation bets that powered global markets through last week’s U.S. political mayhem and the spreading pandemic.

They’re still in the minority, but investors and economists who think America is in for a bout of inflation -- perhaps a serious one -- start the year with some fresh ammunition for their arguments.

The headline number for December came in at 95.9, down 5.5 from the previous month. The index is at the 28th percentile in this series.

The dichotomy of “value” and “growth” investing has become a sharp stylistic divide. But is it helpful? Howard Marks writes in his latest memo how he views the art and science of value investing, especially in the increasingly efficient and complex world we face today.

Venezuela’s hyperinflation, Japan’s experiment in MMT and China’s rise to global leadership carry ominous lessons for the U.S. and investors in its markets.

How does one then make the case for a cautious outlook for stocks?

The Fed juices the stock market in four ways.

What can investors expect this year? Positive (but unsteady) economic growth, a powerful boost in earnings and continued success for information technology stocks, says Raymond James Chief Investment Officer Larry Adam.

The December Employment Report reflected an impact from the pandemic surge and further job losses in state and local government, but wasn’t bad otherwise.

In contrast to the US recession that followed the 2008 global financial crisis, the COVID-19 downturn has elicited strong public support for workers, especially those in essential jobs. Perhaps, at long last, that sentiment will translate into concrete policies that strengthen labor rather than capital.

Most people are probably happy to waive goodbye to 2020 amid the COVID-19 pandemic, which played out in ways few could have possibly predicted. David Mann, our Head of Global Exchange-Traded Funds (ETFs) Capital Markets, isn’t going to make predictions about vaccines, mask-wearing or other such matters, but does offer his insights on ETF industry trends he sees taking shape.

Let's take a closer look at Friday's employment report numbers on Full and Part-Time Employment.

Whereas commodity production had been a major economic driver in emerging markets, we think technology is now the leading force. Semiconductor advancement is the “new oil.” semiconductor companies are so far ahead of their competitors that supply is in fact a constraint—and therefore a major investment consideration.

Although 2020 ended with a flurry of announcements reporting promising results in COVID-19 vaccine trials, there is little reason to expect a robust economic recovery anytime soon. Defeating the virus remains a monumental task, and the wounds inflicted by the pandemic will not heal easily.

The Senate outcome opens the door to future cooperation, while Brexit sets the stage for future frictions.

This should be positive for gold, given the potential for greater government spending and, therefore, inflation.

This week’s letter is the first part of my 2021 forecast. There is simply too much to cover in one letter, and today we’ll start with the most important factor, a known unknown, that I think will be the driver for 2021.