Sector Vaccine Sensitivity, the CPI Fell to 0.0 in October, and the Impacts of Massive Bond Issuance
November 13, 2020 | FIRESIDE CHARTS
Spiking Covid cases have undercut some of the market optimism following the announcement of Pfizer’s vaccine progress on Monday, but the market reaction offers some interesting insight into the “vaccine sensitivity” of various sectors—something we’ll be keeping an eye on as trials continue and results flow in. Meanwhile, the recent flood of new bond issuance could make its presence felt everywhere from CPI—which remains subdued at a reading of 0.0—to the growing spread between growth and value stocks. The U.S. hit a record October deficit of over $284 billion; will the bond market become even more crowded in an attempt to address it with new debt?
1. Emotion in the markets could dramatically exaggerate these relationships…
Source: The Daily Shot, from 11/12/20
2. Both the CPI and Core CPI were below expectations and do not appear to indicate a current threat. Will rates rise simply due to market supply of bonds?
Source: Mizuho Securities & Bloomberg, as of 10/31/20
3. Here is an update on just the Federal government’s operating deficit which must be financed by new bond issuance…
Source: The Daily Shot, from 11/13/20
4. Are rising yields helping to cause the recent market rotation? What will the Fed do to defend their pledge of low rates at least through 2023?
Source: The Daily Shot, from 11/12/20
5. The E-commerce surge is not just a U.S. phenomenon and was occurring long before the pandemic…
Source: The Daily Shot, from 11/13/20
6. Democracies that have had the will and good fortune to control Covid. Please note the scales…
Source: JHU CSSE, as of 11/12/20
7. Have you found yourself putting in longer hours while working from home?
Source: The Daily Shot, from 11/12/20
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.