Preparing for a negative interest rate world
On June 10, 2020, the Federal Reserve maintained its target for the federal funds rate—the benchmark for most interest rates—to a range of 0% to 0.25%. The next Fed meeting is on July 28-29 and given the recent economic indicators and the rise in corona virus cases,...
The Calm before the Storm
Investors will return from a long holiday weekend in the U.S. on Monday to what may be the calm before the storm: a relatively quiet week before a deluge of second-quarter corporate earnings reports are published starting July 13. Most observers are looking past...
What we feared is now happening..
Coronavirus cases are spiking and reopenings are being delayed. Texas Gov. Greg Abbott said the state will roll back some of its reopening measures as coronavirus cases and hospitalizations continue to rise. Florida announced it would suspend “on premises consumption”...
Can we have a vaccine, please?
Two major events occurred this week - Johnson & Johnson, which is working on a Covid-19 vaccine, moved up its expected start date for human trials to July from September. In the afternoon on Thursday, Powell revealed that the Fed could leave interest rates near...
In Search of fundamentals
The U.S. stock market’s rally since late March has been hard to take for many people—including those professional investors who stayed pessimistic too long and missed out on much of it. There’s a rueful saying among traders that markets will move in whatever direction...
We are back to the way it was before Corona! But, are we really back to normal?
New investors have taken the stock market back to February levels while everyone else is desperately searching for a vaccine. Thanks to the coronavirus, roughly 780,000 of bored people staying at home with nowhere to go, have created accounts at Charles Schwab,...
YES or is it actually NO?
UBS Group, developed a portfolio called Yield Enhancement Strategy (YES) aimed at conservative investors searching for income from their investments. At its peak, the portfolio boasted $6 billion in holdings. The YES brochure claimed that the strategy limits exposure...
Which indicator will trip the markets?
Every state has started to reopen its economy, which will give us the first true indications of the current economic direction, outlook into the full impact of the downturn and nature of the recovery. Of course, a spike in deaths from the virus will put us back in a...
Printing Money – How that works…
Every week, we hear that the Fed’s goal is to keep markets functioning after they had previously seized up in fear. But, the way they are doing it is - virtually "printing" money and injecting it into the commercial banking system. By the end of the year, the Fed is...