Looking back on the first six months of fixed income performance this year reveals a stark tale of two strikingly different quarters.
Credit the Recovery
The Global Economy is Healing
Economic signals indicate that the recovery has begun around the world. As expected, China has been the first to emerge from recession, and their economy is moving forward.
A Shifting Narrative
Preliminary June manufacturing activity gauges pointing to continued progress in re-opening the economy have given way to rising concerns about a resurgence of coronavirus.
Resolving the Dichotomy
Many investors are puzzled by the apparent disconnect between the U.S. stock market and an economy that remains in recession with an unemployment rate last seen in the Great Depression.
Stubbed Toe
In recent months, stocks have experienced an impressive rally, resulting in many commentators and analysts creating new and unusual analogies. This week, our favorite is “the market’s new coffee table.”
A Message from Ferguson Wellman and West Bearing
Today, Ferguson Wellman and our division, West Bearing Investments, are making a public statement about our position on racism and our commitment to racial diversity within our company.
The Great Disconnect
There has been a decade's worth of world events in the last three months. An oil price war between Russia and Saudi Arabia, growing tension and trade disputes with China, a global pandemic and this week the worst domestic civil unrest in a generation.
Down in a Hole
Thursday’s unemployment claims continued to paint a dismal picture in the jobs market, where roughly 2.1 million people filed for initial claims last week, which brings the total over the last two months to roughly 40 million.
Baby Steps
All 50 states have now taken steps to re-open according to the Wall Street Journal. While still devastating in magnitude, many high-frequency and leading economic indicators may be past their “worst-ever” levels, showing slight improvement from their recent and historic lows.
Opening for Business
Following a stimulus-induced surge from March lows, blue-chip stocks that had mounted over a 30-percent advance have consolidated gains so far in May.
A Lost Decade
This morning, the U.S. Bureau of Labor Statistics released unemployment statistics capturing the full effects of shelter-in-place mandates: in April, over 20 million jobs were lost, the highest monthly loss on record. This resulted in an unemployment rate of 14.7 percent, the highest since the Great Depression when unemployment was above 25 percent.
"The Bad News Won't Stop but the Markets Keep Rising"
“The Bad News Won’t Stop, but Markets Keep Rising,” read the headline of the business section of the NY Times this week. I have received many questions from many clients and friends over the past couple of weeks regarding this notion.
The Return of $1 Gas?
On Monday, for the first time ever, the price of oil contracts for future delivery fell below $0 to -$37.63 per barrel. While financial markets have adapted to the unfortunate reality of negative interest rates, a negative price for a physical commodity is another issue.
Chart-side Chats
Last week marked the semi-sesquicentennial anniversary of Franklin Delano Roosevelt’s death which sparked many to compare our current financial markets to the Great Depression. As the stock market continues its rapid ascent for a second week and pundits start talking about the shape of the recovery, there is one lesson some overlook from the Depression era — the value of FDR’s fireside chats. During these chats, the president used simple, direct language to convey very difficult news; a format we are keeping in mind.
What a Long, Strange Trip It's Been
Who knew that in 1970, the chorus line of the classic song, “Truckin” by the Grateful Dead would clearly define today’s stock market environment?
From Bad to Better
As the world’s battle against coronavirus rages on, we offer our best regards to those on the front lines battling the pandemic and express our sympathies to those whose health and welfare are being directly impacted.
Unprecedented ... By All Measures
By all measures, this new reality is unprecedented. To start, this is not a typical recession whereby the economy runs “too hot,” such as when a major industry collapses like the banking system during the mortgage crisis or the technology sector of the early 2000s.
March Sadness
First and foremost, we want to extend our concern and empathy to those whose health has been directly impacted by the virus, as well to those in the travel, entertainment and restaurant industries whose jobs are increasingly at risk.
Where To From Here?
While the duration, severity and economic toll of the novel coronavirus COVID-19 are yet to be known, this week investors abandoned any attempt to calibrate market prices using fundamentals and engaged in wholesale panic, selling off equities in all markets around the world.
White Knuckles
The rollercoaster ride continued this week as stocks moved at least 2 percent every day; however, with all of that volatility the S&P 500 was up 1 percent.