MMA Weekly Column: July 20, 2020

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The U.S. reported 77,200 coronavirus cases on Thursday, a record, according to Johns Hopkins University. That spike brought the total number of confirmed U.S. infections to more than 3.57 million. Covid-related deaths are up to more than 138,000. “There’s definitely a sense of nervousness in the market,” said one trader. – Fred Imbert, www.cnbc.com, July 17, 2020.

The bigger economic danger by far posed by the pandemic debt is that it will remain precisely that – debt. The U.S. thus finds itself stuck in a debt trap, alongside the rest of the world. Economists at the Bank for International Settlements coined that term to describe a situation in which prolonged low interest rates induce the accumulation of so much unproductive government and private debt that to raise taxes would risk a catastrophic financial system or fiscal crisis. –Joseph C. Sternberg, “The Covid Fiscal Crisis is About Debt and Taxes,” Wall Street Journal, July 16, 2020.

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MMA Weekly Column: July 13, 2020

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In the midst of a record second-quarter rally, (Jeffrey) Gundlach told Yahoo Finance that Wall Street’s recent out performance in the face of surging coronavirus infections was actually driven by what he dubs the “Super 6,” which consists of Facebook (FB), Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL), Netflix (NFLX), and Microsoft (MSFT). “Without the Super 6, there is no earnings growth in the United States stock market. There isn’t any for the past five years. If you take them out, there’s nothing,” Gundlach added. He estimated that earnings in the stock market were the equivalent to where they were in 2016, when the market was a third lower. “So, the fundamentals are completely out of sync with how the market has been manipulated.” – Julia LaRoche, “Why the Dollar and the Tech Rally are ‘Real Risks’ to Investors,” Yahoo Finance, July 6, 2020.

Confidence builds that the country’s economy is shaking off the coronavirus pandemic. The optimism has spurred mainland Chinese stocks to multiyear highs, with the Shanghai Composite rising 16.5% over eight straight sessions of gains through Thursday. – Chong Koh Ping, Xie Yu, and Joanne Chiu, “China Cautions Investors About Market Exuberance,” Wall Street Journal, July 10, 2020.

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MMA Weekly Column: July 6, 2020

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The U.S. economy created a better-than-expected 4.8 million jobs in June as states gradually eased coronavirus restrictions, allowing more businesses to reopen and rehire idled workers. It marked the second consecutive month of growth in the millions, indicating a continued improvement in the nation’s stressed labor market as business activity resumed. The unemployment rate dropped to 11.1 percent, down from 13.3 percent in May. A separate report on Thursday showed that another 1.43 million Americans filed for jobless aid last week, indicating that layoffs are continuing to mount. – Megan Henney, “U.S. Economy Created 4.8M Jobs last Month,” https://www.foxbusiness.com/ July 2, 2020.

Unemployment is likely to remain in double digits through year end and the economic downturn will be more severe than previously forecast, according to projections released Thursday by the Congressional Budget Office. The (jobless rate) is likely to remain above the pre-coronavirus pandemic level of about 3.5% through the end of the decade.– Kate Davidson, “CBO Downgrades Economic Forecast,” Wall Street Journal, July 3, 2020.

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MMA Weekly Column: June 29, 2020

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Stocks plunged Friday as a rebound in COVID-19 infections began to slow America’s reopening from economically wrenching lockdowns meant to curb the pandemic’s spread. The U.S., which has the most cases in the world, recorded an all-time high of about 40,000 new ones on Thursday after states and cities began allowing people back in stores, restaurants, and public gathering spots such as beaches. – James Langford, “Stocks Slide as Coronavirus Spike Slows US Reopening,” www.foxbusiness.com, June 26, 2020.

Stephen Roach, Yale University senior fellow and former Morgan Stanley Asia chairman, has a warning for U.S. dollar bulls. The prominent economist says that the era of the U.S. buck may be coming to an end and is forecasting a 35% decline soon in the U.S. currency against its major rivals, citing increases in the nation’s deficit and dwindling savings. (He) said that the rise of China and the decoupling of the U.S. from its trade partners is setting the stage for a dramatic weakening of the U.S. currency in the next few years that is likely to end the supremacy of the monetary unit as the world’s reserve currency.-Mark DeCambre, “The Dollar is Going to Fall Very, Very Sharply, Warns Prominent Yale Economist,” www.marketwatch.com, June 23, 2020.

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MMA Weekly Column: June 22, 2020

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Stocks finished Friday lower, after swinging wildly throughout the session due to technical factors. A number of headlines also raised concern about a resurgence in the coronavirus and a slowdown in the economy’s recovery… Apple said it’s reclosing a total of 11 stores in Florida, Arizona, South Carolina and North Carolina. – Fred Imbert and Yun Li, “S&P Ends Roller-Coaster Session Lower, But Ekes Out Gain for the Week,” www.cnbc.com, June 19, 2020.

Heliocentric Mercury was indeed at work early this week. This started June 16 and remains in effect through June 28. This one will be interesting because now Mercury’s geocentric position has turned retrograde (June 18-July 12). This could get wacky, or rather more whacky, because helio Mercury in Sagittarius is given to wild price swings and Mercury retrograde is given to… tricks and misdirection. It is a good time be a chiropractor, or at least know a good one.

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MMA Weekly Column: June 15, 2020

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Federal Reserve officials signaled plans to keep interest rates near zero for years. They projected the
economy would contract anywhere between 4% and 10% this year. Mr. Powell played down the positive news from last week’s report that the economy unexpectedly added 2.5 million jobs in May. – Nick Timiraos, “Fed Plans to Keep Rates at Low Level for Years,” Wall Street Journal, June 11, 2020.

The Fed’s dour forecast, and fears over a resurgence in infections, sent stocks plunging on Thursday. The Dow Jones Industrial Average tanked 1,861 points, or 6.9 percent, the fourth-worst one-day point drop on record. – Megan Henney, “Fed Warns Economic Damage from Coronavirus Pandemic Could be
‘Quite Persistent.’ www.foxbusiness.com, June 12, 2020.

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MMA Weekly Column: June 8, 2020

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The Nasdaq Composite surged to a record high Friday after the U.S. economy unexpectedly added jobs in May as businesses began reopening their doors following lockdowns ordered to slow the spread of COVID-19. The U.S. economy added 2.51 million jobs in May as the unemployment rate fell to 13.3 percent, according to a report released Friday morning by the Labor Department. Wall Street analysts surveyed by Refinitv were expecting the economy to lose 8 million jobs as the unemployment rate spiked to 19.8 percent. – Jonathan Garber, “NASDAQ Soars to Record High After Job Market’s Surprise Bonanza,” https://www.foxbusiness.com/, June 5, 2020.

“There is only one sin, only one. And that is theft. Every other sin is a variation of theft. When you kill a man, you steal a life… you steal his wife’s right to a husband, rob his children of a father. When you tell a lie, you steal someone’s right to the truth. When you cheat, you steal the right to fairness… there is no act more wretched than stealing.” ¬Khaled Hosseni, “The Kite Runner,” Riverhead Books, 2003.

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MMA Weekly Column: June 1, 2020

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Argentina missed interest payments to international creditors on Friday, thrusting the economically besieged country back into default territory. – Natalie Alcoba, “Argentina Defaults Again as Debt Talks Progress,” www.Aljazeera.com, May 22, 2020.

The US dollar edged higher on Wednesday and China’s yuan hit a near nine-month low as worries about the US response to China’s proposed security law for Hong Kong injected a more cautious tone into foreign exchange markets. The US currency had fallen sharply on Tuesday as strong risk appetite encouraged investors into riskier currencies…www.reuters.com, “Yuan Hits 9-Month Low as US-China Tensions Return,” May 27, 2020.

“It’s like déjà vu all over again.” – Yogi Berra

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MMA Weekly Column: May 25, 2020

Note: U.S. markets will be closed Monday in observance of the Memorial Day Holiday.

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Heavy hearts soared Monday (May 18) with news that Moderna’s Covid-19 vaccine candidate — the front runner in the American market — seemed to be generating an immune response in Phase 1 trial subjects. The company’s stock valuation also surged, hitting $29 billion, an astonishing feat for a company that currently sells zero products. But was there good reason for so much enthusiasm? While Moderna blitzed the media, it revealed very little information — and most of what it did disclose were words, not data. – Helen Branswell, “Vaccine Experts Say Moderna Didn’t Produce Data Critical to Assessing Covid-19 Vaccine,” www.statnews.com, May 19, 2020.

Uncertainty. Mixed signals. That’s the nature of Venus retrograde in a square aspect to Neptune last week. It’s going to continue for a while, as this aspect unfolds in a 3-passages series through the end of July. Nothing is real; nothing is clear. So just sit back and try to relax without putting unnecessary stress on your self or those around you. You can’t make a detailed plan, so learn to be present in the moment.

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MMA Weekly Column: May 18, 2020

Due to preparation for this weekend’s Mid-year financial markets webinar (Sunday, May 17), there is no MMA Weekly Column. We look forward to seeing many of you on Sunday. If you plan to attend please sign up no later than Friday, for the office is closed on Saturday. On Sunday, we anticipate that our office will  be extremely busy helping clients, who have pre-registered, log into the live webinar.  We will not be able to guarantee our availability to help clients sign up and register for the Webinar after Friday.

This column will return next weekend, for the week starting May 25. Enjoy your week ahead!

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