Succinct Summary: The economy has improved a lot since the bottom, and headline economic activity is nearing a full recovery. However, the recovery has not been shared equally. There have been a small number of big economic winners and a much larger number of economic losers from COVID. This will help keep the government pushing for more stimulus for a long time. In the past, this stimulus has tended to help the winners even more. Editor's Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.
A Personal Note: A lot has happened in the last two weeks we have been away. We start on a very positive note—warm congratulations to my co-author Scott Krisiloff and his wife on the birth of their beautiful twins this past week. On a different note, the challenge of racism has come to the forefront of global news. This week, we have a special section on quotes on the reactions from corporate management teams on the issued of racism. The bottom line is that we have a problem that needs fixing. I have also written a personal article about my experience of racism in Scandinavia. - Erick Mokaya Succinct Summary: There are some glimmers of hope across such industries like airlines, travel and retail as demand picks up from the April lows. We are, however, being cautioned about being too excited and urged to be cautious. All in all, there is significant pent-up demand.
Succinct Summary: The Coronavirus continues to spread globally and no one knows how bad this could get. On the one hand we have projections of its exponential growth. On the other is the hope that seasonality will help stem the tide. In the face of a potential pandemic, the health of the economy seems like a trivial concern. Still, this panic is having a material affect on economic activity and thereby markets. The Fed has tried to address this with lower rates, but even the Fed admits monetary policy can't do much to stop a virus. Where monetary policy will fail, hopefully modern medicine will succeed. Everyone, stay safe out there!
Succinct Summary: The consumer continues to show strength with higher holiday spending. Business spending isn't quite as strong though but companies, especially small businesses, are optimistic. As such, most CEOs don't expect a recession in 2020. Historically, presidential election years are usually good for the stock market.