Insights

Top News:

10/19: Investors held onto ephemeral optimism for the passage of a pre-election Covid relief package by Tuesday.  Cementing its status as the world’s only economic engine this year, China reported positive 3Q GDP growth, even if the tally fell shy of expectations.  In Europe, a “no deal” Brexit has become a distinct possibility.

 

10/20: Despite a unilaterally self-imposed deadline, House Democrats and the White House continued negotiations over the fiscal relief bill  A second late-stage U.S. vaccine candidate may be ready for FDA review for emergency use before year-end.  In addition, the Justice Department filed an antitrust lawsuit against Google.

 

10/21: Vacillating opinions on the likelihood of a second U.S. fiscal recovery bill continued to whipsaw market sentiment.  Painting a picture of uneven recovery, the Fed’s Beige Book showed economic activity in the U.S. was “slight to modest.”  Against a backdrop of renewed fears over an uptick in infections in Europe, EU’s top Brexit negotiator struck a more positive tone on negotiations, even as U.K.’s upper house of Parliament dealt a blow to its own government’s position.

 

10/22: While the Street welcomed the lower than expected weekly jobless claims tally, it remains wary as to whether such improvement can be sustained.  September’s Conference Board Leading Economic Index increased, while concerns were noted over the “decelerating pace of improvement” heading into 4Q.  Existing home sales jumped, notching a fourth straight month of increase in September.

 

10/23: FDA approved the first Covid treatment for emergency use, in spite of one WHO study finding it had “ little to no effect” on mortality.  A key gauge of senior business execs indicated the U.S. economy grew at the start of the fourth quarter, while the same survey showed a mixed picture for Europe, where the reading dipped due to contraction in the service sector.

 

Heard on the Street:

“The prospects for an actual deal still remain minuscule as the Republicans in the Senate vehemently oppose the size of the stimulus discussed, but hope runs eternal in the markets and investors continue to remain optimistic that if some sort of deal is reached between the White House and the House of Representatives then the momentum and pressure from Trump will force the Senate to cave and approve the package.”

— Boris Schlossberg, managing director for at BK Asset Management, in a note on 10/20/2020

 

Longer Game:

According to one prominent strategic affairs analyst, the Quad – a loose coalition comprised of Australia, India, Japan, and the U.S. – will accelerate its multilateral security cooperation to ensure a “free and open Indo-Pacific.”

 

Bonus:

Do the affluent invest differently?  According to one recent behavioral finance study, while there are areas of commonality amongst the well-off and everyday investors, there are appreciable differences in attitudes toward engagement of professional advice, risk-taking, and active vs. passive investment management.