Quarterly Market Commentary
It is said that a rising tide lifts all boats, and that goes for monetary tides as well. Watching the market every day, this is exactly what it has felt like; stocks just want to go up...fundamentals be damned.
Understanding The Apparent Mismatch Between Current Economic Conditions And The Financial System
Recently, in the wake of the dramatic, catalyzing events associated with the COVID-19 pandemic, analysts have struggled to match the action in the Economy with that of the Financial System. Existing disparities of inequality and maldistribution have been dramatically exacerbated as the financial indices have soared.
Time for Some Hedging?
The economic calendar is extensive with a focus on housing and consumer behavior. Expect market participants to look for any sign that the economic recovery is stalling in the face of the COVID-19 surge and the slower pace of reopening.
Earnings Season Begins with Low Expectations; Will it Be a Catalyst?
It is safe to say that expectations are low as the bottom up consensus for the S&P 500 calls for a year over year earnings decline of about 45% in the 2Q. This would be the largest year over year decline since 2008. But that is well understood at this point.
The U.S. Treasury is expected to announce a June budget shortfall of about $863 billion, bringing the 12-month total to nearly $3 trillion (or about 14% of pre-pandemic GDP). The red ink will continue. Lawmakers are expected to approve another round of federal stimulus later this month. None of that is worth losing sleep over.
Precious Metals Were the Winners in H1 2020… And It Wasn’t Even Close
Precious metals were the big winners for the first six months of 2020. Spot gold took the first place position, rising over 17 percent, followed in second place by silver, up nearly 2 percent. Palladium rounded out the top three, essentially flat at negative 10 basis points.