With the world re-opening and re-closing in harmony, one can’t help but to feel like a ball trapped in a ping pong machine. Thus, we wanted to bring you the most digestible soundbites from the last week to help provide clarity. This week’s soundbites come from CNR Research, (for a more comprehensive report see attached):
Major Developments This Week// Weekly Update
- New infection case counts are rising in Southern and Western USA and falling or flat in East, Midwest.
- Only 2 states meet all 4 conditions for safe reopening: NH, NJ; 9 states meet 3 criteria. Majority meet 1-2 conditions.
- Crucibles are beneficial for next few months as the debate over proven measures that substantially reduce transmission
is over. Wear a mask.
- New cases in New York fall so much that someone “turned off the hose”.
- When similar protocols are enforced in West and South we expect peak in the new cases in the next 1-2 months.
- A significant part of the reported increase in cases is attributable to increased testing.
- Younger patients, better treatment approaches keep present data on fatalities on a downward trend.
- We expect only a moderate increase in fatalities in the months ahead.
- Europe new infections remain well controlled and low. Very low in Asia.
- Election polls swing more towards Biden, and a 55% prediction Democratic White House and both chambers.
- Impact of potential higher taxes on economy and equities. Still too early. Higher taxes now makes no economic sense.
- Fed communications contain clear commitment to keep interest rates low for an extended period.
- IG bonds at these low interest yields provide only principal preservation that covers inflation.
- Over 4 million jobs regained in June, a better outcome than expected. Still significant unemployment remains.
- Global manufacturing, car production surging, and services leading indicators show continued growth ahead is likely.
- Global economic recovery gains back about 50% of all the declines experienced from Covid.
- Pause, not reversal in reopening means a lull in the upward economic recovery in July.
- Asia economic activity remains a leading indicator for USA, Europe once we establish the right safety protocols
- The recession is over, and recovery well entrenched to continue.
- New times require new thinking for Strategic asset allocation. Consider all the factors but impact can be significantly beneficial.
- Equity markets likely to be higher a year from now, despite above average downward volatility at any time.
- Yields stay low for 2 years or longer as recovery takes until at least end of 2021. Stay focused on your goal achievement and investment plan.
- Governments in USA, Europe and Asia are fully committed to putting money into economies to sustain recovery.
- High dividend, high yield opportunities are attractive.