Insights

Top News:

6/08: Officially declaring an end to the longest economic expansion in U.S. history, the National Bureau of Economic Research said the country has entered a recession of unknown duration.

 

6/09: A May survey by the National Federation of Independent Business (NFIB) showed a rebound in optimism amongst small business owners.

 

6/10: On the heels of a muted Consumer Price Index report, the Fed voted to keep benchmark rates near zero, a dovish stance likely to be maintained through 2021.

 

6/11: Pace of both initial and continuing weekly jobless claims trended lower, even though 44 million Americans have filed for benefits since the pandemic’s onset.  Meanwhile, allaying some deflationary concerns, the Producer Price Index snapped three straight months of decline, as food and energy prices increased in May.

 

6/12: Governors of Oregon and Utah have paused their respective states’ phased reopening efforts as they investigate recent increases in new coronavirus cases.

 

Heard on the Street:

“Over any limited segment of the market cycle, it doesn’t really matter whether the beliefs of investors are well-informed or wildly misguided. It also doesn’t really matter, in the short-run, whether market valuations are consistent with strong positive long-term returns or with negative ones. In the short-run, what matters is whether investor psychology is inclined toward speculation or toward risk-aversion.”

— John Hussman of Hussman Investment Trust in a note, 6/08/2020

 

“As states begin to reopen, small businesses continue to navigate the economic landscape rocked by COVID-19 and new government policies. It’s still uncertain when consumers will feel comfortable returning to small businesses and begin spending again, but owners are taking the necessary precautions to reopen safely.”

— Bill Dunkelberg, chief economist at NFIB as quoted by MarketWatch, 6/09/2020

 

“Given the magnitude of the rally, it would shock me if we had a one day sell-off and that’s it.  The stocks that are up the most from the lows are still the risk-on, high beta, value, small-cap stocks. They’re still the big winners and I would suspect that there’s more pain to come near-term before the market clears out kind of this excessive speculation that we’ve seen recently.”

— Andrew Slimmon of Morgan Stanley Investment Management in a CNBC interview, 6/12/2020

 

Longer Game:

Lee Hsien-Long, the prime minister of Singapore, a tiny nation long accustomed to finessing geopolitics, believes whether Pax Americana can be sustained will rely upon how the US and China interact in a shifting global order.

 

Bonus:

While characterizing COVID-19 as “his worst nightmare,” Dr. Anthony Fauci still expects “more than one winner in the vaccine field, because we will need vaccines for the entire world—billions and billions of doses,” according to excerpts from the Biotechnology Innovation Organization’s virtual conference.  In the meantime, given there’s much scientists don’t know yet about immunity to COVID-19, concerns are rising over reports of new infections in select states.

 

OECD released its semiannual report, predicting worldwide economic contraction of at least 6% in 2020, and outlining two scenarios for recovery in 2021, depending on course of the pandemic.