COVID-19: What to Expect

Updates are in reverse order, meaning the latest update is just below. UPDATE: October 20, 2020 Herd Immunity: Doing the Math In June, we observed that the US had embarked on a herd immunity approach to dealing with the COVID-19 pandemic. With little public discussion or debate, the US has embarked on a herd immunity … continue reading →

Rally Faces Another Test

Futures have given up all of Friday’s rebound gains and then some, again testing the IH&S neckline and the bottom of the rising white channel from last March. At the risk of sounding dramatic, a failure of the channel would mark the end of the current rally and usher in the correction suggested by our … continue reading →

Yield Curve Model: “Correction Imminent”

Our yield curve model is again sounding the alarm on overpriced equities. Unless the 10Y – which closed its June 8 gap this morning – declines sharply right away, the 2s10s spread signals a sharp equity correction.The bad news for equities? A sharp drop in the 10Y also portends a correction. continued for members… … continue reading →

Housing Boom: 2007 Redux

Single-family home starts continued to gain from rock bottom interest rates and the exodus from urban, multifamily housing amid the pandemic. September residential starts grew 1.9%, while permits rose 5.2%, the fastest since the 2007 peak. Single-family inventory dipped to 3.3 months, the smallest since 1963, while multifamily starts cratered by 16.3%. It was a … continue reading →

Retail Sales’ Last Hurrah?

September retail sales sharply beat estimates, coming in at +1.9% versus 0.8% expected. With enhanced unemployment and virtually all other stimulus having dried up, however, this could be retail’s last hurrah. But, it’s enough to boost stock prices on this OPEX Friday 2 1/2 weeks before a presidential election. continued for members… … continue reading →

The Pandemic’s Stark Reminder

Futures tagged our initial downside target overnight as markets are once again reminded that the pandemic is far from over. The shutdown headlines out of Europe won’t surprise anyone who has been watching the COVID-19 numbers. The US, which was considerably less successful in suppressing cases following the initial or second surge, is on the … continue reading →