The battle over stimulus continues in Washington as many Americans grow increasingly reliant on savings and other non-paycheck measures to cover expenses amid the accelerating shift from temporary to permanent layoffs and the expiration of the Paycheck Protection Program. Over in the equities market, new offerings are outnumbering buybacks for the first time in a decade and the U.S. Net Equity Supply is growing—thanks in large part to the recent IPO boom. And though the yield curve is inching toward “normal,” the situation is complicated by uncertainties around stimulus measures and the Fed’s capacity to cope, given that their ownership of the Treasury market is already at record highs.
1. To the Fed’s point, if there is no more stimulus from Washington then millions of Americans will be in deep economic trouble…
Source: The Daily Shot, from 10/20/20
2. The PPP helped tremendously…but now that it is over…
Source: The Daily Shot, from 10/20/20
3. This is why the government needs to focus an effective relief package for small businesses:
Source: The Daily Shot, from 10/21/20
4. The IPO market has been so robust in 2020 that for the first time since the Great Recession, net stock supply is actually growing…
Source: Bloomberg, from 10/20/20
5. This is a similar scenario to the banks in 2007-09. If you are going to buy a dividend “achiever” type fund, make sure it has robust quality screens!
Source: The Daily Shot, from 10/20/20
6. The yield curve is moving towards a “normal” shape past 2023…
Source: The Daily Shot, from 10/21/20
7. Interest rates in the middle and long end of the yield curve are rising on fears that the new stimulus package, and the resulting Treasury bond issuance, will not be fully absorbed by Fed QE.
Source: The Daily Shot, from 10/21/20
8. Hopes for a massive stimulus package are putting new pressure on the U.S. Dollar. The Yuan is appreciating even more than the USD decline as their rates and economy both climb…
Source: The Daily Shot, from 10/21/20
9. Is the second wave of Covid in Europe is causing a de facto shutdown?
Source: Arbor Research and Trading, from 10/21/20
10. Despite all the trade war antics and the pandemic, China looks to be the winner in trade post-Covid. Shall the conspiracy theories begin?
Source: J.P. Morgan, from 10/21/20
11. Put another way, every three days the world has another 1 million+ new Covid cases. In the U.S., only ~10% of the new cases are aged 70 or older…
Source: Statista, from 10/20/20