[Market Madness] Edition 0083
Sunday Recap
Calm, for now
Well folks, I hope everyone has had a nice weekend. Today’s piece is going to be a little short, and will help us cover the weekend and get ready for whatever Monday may bring.
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Fundamentals
Friday Close:
Dow Jones Industrial Avg: +1.44%
S&P 500: +1.05%
NASDAQ: +0.66%
US 10 YR: 0.637%
Crude OIL: $40.53
Market Madness Portfolio: +0.62%
COVID 19 Global Cases: 12,813,864 (Sunday Update)
Indices Overseas:
FTSE 100: +0.80%
Nikkei 225: -1.06%
Hang Seng: -1.84%
TEDRATE: 0.16
LIBOR (3 month): 0.26625%
Binge buying
Between June 17 and 26, the Fed purchased debt at face value as part of its market stabilization program in the amount of $1.3 billion. In this process, they’ve expanded their targets, purchasing debt from 794 companies as they try to develop their own debt portfolio as part of their monitoring and stabilization program. In the same time frame, we saw ETFs that track corporate bonds increase in market value by $1.2 billion.
The chairman of the Fed, Jerome Powell, in tandem with Treasury Secretary Mnuchin, have sought after all beneficial actions that will help continue to prop up and further assist in economic recovery. As of late, the Fed has remained firm on their line in the sand, avoiding the purchase of equity securities and strictly focusing on bonds and bond-funds. The equity markets, according to Powell, are still performing within their normal operating bands from an economic point of view, and the focus remains on containing the challenges seen in the corporate debt space.
Some market watchers are growing weary of the speculation that appears to be growing within the equity space. We are seeing some companies continue to blast off in their stock prices, and we’ve also seen our fair share of post-bankruptcy stock booms which have been attributed to the novice Robinhood day-trading community. Some of the best and brightest have been suggesting another market downturn is looming over the horizon, but these warnings have pretty much fallen on deaf ears. COVID 19 is still king of the hill, waving its fingers and moving markets however it wants to. While volatility is low, perceived risk from news relating to the virus is high, which has helped drive many of the smaller rises and falls we’ll see from day to day. With case counts getting higher and growing faster, it is unlikely that we are to see the true glimmer of hope this week, but we should always remain hopeful for forward progress.
The futures overnight will give us a little sense for what tomorrow will bring, if any sense can be derived from any recent market movements.
Quick Takes
Florida reports 15,299 new cases yesterday, a record one-day spike. (via WSJ)
How has the job market evolved over the last 6 months? (via WSJ)
White House officials seem to be pitting themselves against Dr. Fauci. (via CNBC)
Attorney General William Barr told Donnie not to provide Roger Stone clemency. (via CNBC)
Reader’s Corner
The reader is out of the office today, and left a note that they’ll be back on Monday.
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