Insights

In response to last week’s inaugural WuRevue update, a wise client commented, “We don’t yet know what we don’t know.” 

 

This simple yet poignant remark serves as a stark reminder of the importance of intellectual humility, as well as the need to guide clients even more intelligently in a market environment littered with unknowns, a topic covered extensively by Howard Marks, co-founder of Oaktree Capital Management in his widely read memo entitled “Uncertainty.”

 

Top News:

5/26: Investor sentiment was buoyed by vaccine development endeavors underway at Novavax and Merck.

 

5/26: Halting two straight months of decline, Conference Board Consumer Confidence Index^® showed a slight uptick, anchored by stronger short-term outlook for income, business, and labor market conditions.

 

5/27: Looking past yet another flashpoint in Sino-American relation and pessimistic monthly survey of economic conditions by the Fed, investors pushed market averages to milestones not seen since March.

 

5/28: NY Fed’s Weekly Economic Index hinted economic activities appeared to have bottomed out in early May.

 

5/29: Though lower than expected, University of Michigan’s May Consumer Sentiment Index saw a modest improvement, while the Commerce Department reported American households saved more in April as spending has been restrained amidst ongoing economic challenges.

 

Heard on the Street:

“Sleeping well? Better than I was in late February and early March, let’s just put it that way… I would worry almost more that a second outbreak would undermine confidence… A full recovery of the economy will really depend on people being confident that it is safe to go out and safe to engage in a broad range of economy activity.”

— Fed Chairman Jerome Powell in a Princeton-sponsored webinar on 5/29/2020 

 

“We suspect that the sharp rise in stock markets has been driven by a closing of shorts. From here, a move higher will need new longs and inflows.”

— Robert Buckland, chief global equity strategist at Citi told MarketWatch on 5/29/2020

 

The Longer Game:

As the world economy’s bifurcation into two spheres of influence appears preordained, a key area of competition in the US-China marathon is establishment of technological infrastructure and industry-setting standards.  With China’s new 15-year project named “China Standards 2035,” the follow-up to its “Made in China 2025” plan , the Brookings Institution hosted a webinar assessing the current landscape and trajectory.

 

Bonus:

True or False? Efforts to re-open US economy is complicated by Twitter bot disinformation campaigns, according to researchers at Carnegie Mellon University.