Bringing the Economy Back from Life Support
With recent data showing a coronavirus-driven recession in the United States appears inevitable, the question for many investors is how long it will last. Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income, weighs in on the differences between this one and other recessionary periods—and whether policymakers can engineer a recovery.
The Full Extent of Income Support for Impacted U.S. Households Is Impressive
Global equity index futures are trading up about 4% this morning. The coronavirus data over the weekend was less bad. The growth rate in new confirmed cases over the last 24 hours globally was the lowest since March 17—a welcome sign that containment measures are gaining some traction in slowing the spread of the disease.
Navigating the Maze of Models
Once again, no one cares about the economic calendar. There are a few items with recent data – jobless claims, mortgage applications, and Michigan sentiment – but most reports are old news. Everyone is focused on the increase in coronavirus cases and deaths. There are plenty of predictions, each based on model from a reputable source. The variation is wide.
Weekly Gasoline Price Update: Regular and Premium Down 8 Cents
The price of Regular and Premium are down eight cents each from last week. According to GasBuddy.com, Hawaii has the highest average price for Regular at $3.19 and Wisconsin has the cheapest at $1.41. The WTIC end of day spot price closed at 26.08, up 27% from last week.
World Markets Update
All eight indexes on our world watch list posted losses through April 6, 2020. The top performer is China's Shanghai with a loss of 9.38%. Our own S&P 500 is in second with a loss of 17.55% and in third is Hong Kong's Hang Seng with a loss of 17.57%. Coming in last is India's BSE SENSEX with a loss of 33.12%.
Is the Market Still Overvalued?
Here is a summary of the four market valuation indicators we update on a monthly basis.
- The Crestmont Research P/E Ratio
- The cyclical P/E ratio using the trailing 10-year earnings as the divisor
- The Q Ratio, which is the total price of the market divided by its replacement cost
- The relationship of the S&P Composite price to a regression trendline