The Dividend Cafe

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Daily Covid and Markets - Tuesday August 11 Aug 11, 2020

Show notes

Market futures were screaming higher yet again when I woke up at 3:30am PT this morning, and if the headlines were to be believed (they often aren’t in financial media), it was because the market was reacting to Russia’s claim to have a working vaccine for COVID-19. The market opened 300 points or so, stayed up most of the day, but then sold off late in the day (dropping from +300 to -100).

The Nasdaq and Big Tech were actually down all day today, even when the Dow was up 300, and the Nasdaq ended off 1.7% today. Energy, Financials, and REIT’s were still positive on the day. The market was not rallying on Russia vaccine news, in case you were wondering, and today was an extremely mixed bag of conflicting signals and confusions. COVID Health Information

• So speaking of that Russian vaccine registration, here are the facts. First, we are talking about Putin and Russia. Let’s just leave that out there as the fact on which all other facts sit. Second, the registration is conditional; trials are actually still ongoing. Third, production has not yet begun. Fourth, no trial details or doctor/scientist reports have been released, let alone peer-reviewed. Fifth, would you take this vaccine?

• The total number of Americans hospitalized WITH COVID-19 (which is categorically different from being hospitalized BECAUSE OF COVID-19) has dropped to below 50,000 people nationwide.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Replay - National Conference Call on Market Outlook August 10, 2020 Aug 10, 2020

Show notes

This is the replay of the Market Outlook National Video Call with David L. Bahnsen and Scott Gamm from August 10, 2020.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Price Discovery and the Human Spirit Aug 07, 2020

Show notes

In this week’s Dividend Cafe we will:

Summarize this week’s action in the market, with a summary of the better-than-expected July jobs report
Look at the intense pursuit for a COVID vaccine and what that means for markets
Add a little detail and caveat to the current market rally, and big tech’s role within it!
Discuss what it will taken to energize midstream energy
Correct the record on Q2 GDP growth
Think through the growing tensions with China
Simulate the stimulus
Look under the hood of the current state of the economy (pretty extensively), covering manufacturing, auto sales, hotel traffic, restaurant traffic, and all the things …
Politics & Money – the polls are tightening, and we look at a long-held theory about predicting the Presidential winner …
Chart of the Week – our cup runneth over with optimism for dividend growth, thanks to present conditions, and past lessons
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Daily Covid and Markets - Thursday August 6 Aug 06, 2020

Show notes

The market was pointing down over 100 points in the morning futures this morning, but reversed into positive territory when the weekly initial jobless claims came in at 1.18 million vs. the 1.42 million expected (the lowest weekly claims number since the March lockdowns began). After a grind throughout the day, and this time led by technology, the market closed up 185 points.

COVID Health Information • New cases were down 25% week over week and, once again, all the talk is around what data may be missing with various weather and tech challenges around the country. Testing itself is down 20% and I am now in both camps as to why that is – that the decreased testing is both a reflection of improved conditions (less symptoms means less test demand), and some glitches and delays around weather and capacity, etc.

• One analyst I adore postulated that less people are getting tested because they have seen media reports how long lines and delays to get tested (and get results). I am not sure what to make of that, but I can’t rule it out.

• With a h/t to the reader who turned me on to this, I am shocked that the Clark County, Nevada data (i.e. Las Vegas) is not getting any kind of national attention (okay, I am not actually shocked).

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Daily Covid and Markets - Wednesday August 5 Aug 05, 2020

Show notes

The market rallied 375 points today, again closing at its highest point of the day as late trading added momentum to the market. Clearly expectations are high for a stimulus deal, there was a bit of curve widening helping banks today, and earnings season was substantially better than had been anticipated. I would love to credit the vastly improving COVID picture with some of the Dow move higher, but the COVID challenges this summer didn’t do much to harm the market, so I don’t think one can have it both ways.

(Note the time ledger on the Dow chart; I started today on the eastern time zone but closed the day on pacific)

The ADP jobs report did show 167,000 new jobs month over month, but one would think the number would be higher given the losses of the lockdown. The strong comeback number in June versus this more tepid comeback number in July seems to indicate a slowdown in re-hiring, not surprising given the policy measures taken in July.

As is often the case, I can’t explain why but today’s missive has been one of my favorite to prepare.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Daily Covid and Markets - Tuesday August 4 Aug 04, 2020

Show notes

The market was up 164 points today, though the % move up in the S&P and the Nasdaq was less. There was a little move up to start the day, then a flat range for most of the day, followed by a dip, and then a rally into the close. My own feeling is that investors are a little hesitant to be unexposed into a close out of fear that a stimulus deal may get announced while markets are closed … (it isn’t impossible, but I doubt that it is imminent).

The “hurricane” set to come through NYC turned out to be a rain shower, and something tells me this won’t be the last time a doom & gloom prediction for New York City turns out to be wrong this year.

Speaking of NYC, they have LESS THAN a 1% positivity rate right now with high levels of testing, and that positivity rate has been less than 2% for almost two months! Their new cases are almost not registering at all (57 yesterday, same as some small towns in the midwest). Hospitalizations were just 15 yesterday – again, 15 is a fraction of what towns 1/100th the size are experiencing. And mortalities have been zero many days recently, and not more than ten in a day for several weeks.

So I am pleased to see all of this in NYC, and hopeful that it leads to steps towards economic revitalization, not the opposite. Now, with NYC’s health status out of the way, let’s jump everywhere else we normally go.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Daily Covid and Markets - Monday August 3 Aug 03, 2020

Show notes

COVID Health Information

• There is discussion of testing coming down in the last few days and it will be useful for validation of case reductions and so forth if the testing does not slow down – for the case declines to be accompanied to steady or growing testing, not reduced testing. The best way to measure that is in the positivity rate, of course.

• Much of the testing reduction, though, appears to be related to the hurricane near Florida. I elaborate on Florida data below in the F.A.C.T. section.

• The data point that is most disconnected from testing, the result lag problem, and even mortality reporting is Hospitalizations. Nothing drives policy decisions more than hospitalizations. If by the end of this week we continue to see hospitalizations and ICU’s declining, regardless of testing and cases, I believe we will see some of the more onerous restrictions start to be lifted as August kicks into full gear.

• The International Journal of Infectious Diseases has published a study evaluating data in Japan to evaluate the effectiveness of school closures in limiting transmission of coronavirus. The report is a tough but brilliant read, and ultimately concludes that school closure was not an effective policy act in constraining transmission.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

My Weird Interest in the Important Jul 31, 2020

Show notes

In this week’s Dividend Cafe we will …

Give a quick summary of the market this week Do a deeper dive into all the rage in big tech Question if big tech is the only game in town to invest in innovation Look at health care spending in Q2 and why it may shock you Analyze the dollar’s decline Explore the power of the Fed, in very practical terms … Wonder out loud what is going on with the Main Street Lending program The highlight of the week – What to think about Equities Right Now Walk through the full Economic Report Card of the week Politics & Money – the Biden VP pick, investor fears, and the fate of a new stimulus deal Chart of the Week – why China tensions are not going anywhere, and most people like that! … and much, much more …

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Daily Covid and Markets - Thursday July 30 Jul 30, 2020

Show notes

COVID Health Information

• The seven-day average of new tests is now 820,000, a new high (by far). Nationwide, the increase in cases over the summer is practically in line with testing increases. It is the select states where positive cases outpaced increases in testing.

• Add Johnson & Johnson’s Ad26.Cov2-S to the list of vaccine candidates showing very positive results. Their trials thus far were limited to monkeys, though a clinical trial has now begun in Europe and the United States. The full study has been peer-reviewed, and is available upon request. The source of excitement here is that the strong antibody response is coming from a single dose … They are targeting phase 3 trials for September

• A source of mine had been sending me daily updates throughout the last few months on one of New Jersey’s premier hospitals and their COVID exposures, particularly when they were seeing hundreds of patients per day, suffered extraordinary losses, and were having to re-purpose facilities to meet demand. At some point it waned, then they shut down the COVID wing, then the COVID patient load of standard inpatients and ICU steadily declined. Well, today, I got an update. For the first time, this hospital does not have a single COVID patient. Praise the Lord.

• Not a lot of change in the general messages of the chart quadrant today. Cases are declining; hospitalizations are declining in the troubled places and flattening elsewhere; a few smaller states are seeing some mild growth in cases off of very low levels. The questions in front of us deal with society’s ability to “live” with this virus, and to continue mitigation against severity and mortality.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Daily Covid and Markets - Wednesday July 29 Jul 29, 2020

Show notes

COVID Health Information

In the “F.A.C.T.” section below, you will see what I believe is the most important data point this summer around the Arizona/New York case data …

Yesterday’s new cases vs. the Tuesday of last week declined 4.5%, making it the third day in a row of week-to-week decline, something that Pantheon pointed out to me this morning has not happened since late May. The 7-day moving average of new cases is down 4% since its peak.

The California and Texas hospitalization reporting is totally screwed up, and so national trends are distorted when two of the largest states can’t get their reporting straight. Where states had a hospitalization issue and are not struggling with reporting, the trend is very clear that hospitalizations are declining, ICU’s are declining (though not as much as hospital admissions), discharges are increasing, and stay time in hospitals has been cut in half from what it was in April.

I want to provide all data, good and bad, so I have been including each day the facts around case growth in some states like Oklahoma, Alaska, Rhode Island, etc. And while the empirical fact of case growth, not case decline, has been pointed out there, I think it adds to the honesty of the presentation to mention that the “case growth” there has come off of very, very low bases.

A fascinating look at Sweden’s situation with some quotes from the “Anthony Fauci of Sweden” (Anders Tegnell) throughout.

I read a fascinating study this morning from the Mayo Clinic concluding that there have been substantially lower COVID infection rates for those who have received vaccines in the last five years for non-COVID related diseases such as polio, Hepatitis, geriatric flu, and others … Happy to send to those interested (a heavy read).

Sometimes the thing to do when forecasts are off is not be critical, but be grateful. And also, to learn for the future …

DividendCafe.com TheBahnsenGroup.com

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