The punchline is that COVID-19 has had a dramatic and lasting negative impact on public transportation as measured by our analysis of Apple Maps data. Below we provide examples of some of America's largest cities and the trends around driving, walking and public transportation. It's probably not a good idea to go long muni bonds. … Continue reading COVID’s Lasting Impact On Mobility
Tag: fixed income
Equities Continue to Experience Fund Outflows as Technology Stocks Slide
Equity funds continue to experience fund outflows as taxable bond funds enjoy fund inflows. (see table & chart below). A modicum of sanity has crept into the equity markets insofar as Technology names are concerned. High multiple growth names that were driven primarily by speculation and momentum have finally started to pull back over the … Continue reading Equities Continue to Experience Fund Outflows as Technology Stocks Slide
Fed Disclosure: Secondary Market Corporate Credit Facility Includes Amazon, Apple, Microsoft & More
Adobe (ADBE), Amazon (AMZN), Apple (AAPL), Broadcom (AVGO), Microsoft (MSFT) and Oracle (ORCL) were among the Technology companies included in the Fed's July 10th SMCCF disclosure. The Fed has purchased $137 million par value of Technology company fixed income securities through June 26th or approximately 9% of a total par value of approximately $1.5 billion. … Continue reading Fed Disclosure: Secondary Market Corporate Credit Facility Includes Amazon, Apple, Microsoft & More
State-Led Capitalism
Private markets are no longer primarily determined by the actions of private buyers and sellers. The State now controls private markets as the primary mover. Guessing the timing, scale and duration of massive fiscal and monetary programs has superseded if not largely replaced fundamental analysis. That's not to say that fundamentals do not matter, but … Continue reading State-Led Capitalism
The Forever Bubble-Blowing Fed
The Fed's behavior in recent months has been something out of a horror movie. The low interest rate, expansionary monetary policies introduced by former Fed Chair Bernanke and continued by former Fed Chair Yellen have dramatically accelerated under current Fed Chair Powell. Bernanke dealt in $Billions, Chairman Powell prefers $Trillions. Click any of the charts … Continue reading The Forever Bubble-Blowing Fed
Mr. Market Is Trading On Speculation. Fundamentals Will Matter Again.
The market is trading on speculation. Fundamentals don't matter now. Fundamentals will matter again. The Fed can print only so much money before inflation rears its ugly head. We can't continue to devalue the dollar as a matter of long-term monetary policy without consequences. Our "print first, ask questions later" monetary policy and "subsidize everything" … Continue reading Mr. Market Is Trading On Speculation. Fundamentals Will Matter Again.
Credit Risk Is Substantial and Underestimated
There is significant credit risk that is not priced into the markets. Looming credit defaults and downgrades - especially high grade to high yield downgrades ("fallen angles") - are bound to create uncertainty beyond the credit markets. There is significant default and downgrade risk associated with Commercial Real Estate ("CRE") credits. Nobody knows when major … Continue reading Credit Risk Is Substantial and Underestimated
Cheap Debt: The Gift that Kept on Giving
Policy makers have held interest rates artificially low since the 2008 financial crisis. This unnatural act - preventing interest rates from finding a natural equilibrium - made it difficult for investors to find yield and equity market valuations ballooned as a result. The cheap debt train has pulled into the station. (See the debt issuance … Continue reading Cheap Debt: The Gift that Kept on Giving
The Next Recession Will Prove Different for U.S. Equity Markets
A recession is defined as an economic period where GDP declines for two consecutive quarters. We believe the next recessionary period will be different as a result of artificially low interest rates. The United States' proclivity to print money and maintain artificially low interest rates makes it difficult for institutional investors to find yield. Gone … Continue reading The Next Recession Will Prove Different for U.S. Equity Markets