As worldwide coronavirus cases surged last week, particularly in the United States, investors gravitated towards bonds, steering clear of riskier assets. This trend was reflected in a variety of exchange-traded funds focused on significant asset classes for the trading week ending June 26.
HHS Secretary: ‘window is closing’ for battling Covid spread: Politico
Global death toll from Covid-19 surpasses 500,000: USA Today
Russian allegations about bounties for killing US troops reported months ago: NYT
Trump: US intelligence didn’t categorize Russian bounty information as credible: WSJ
US withdrawal from WHO poses significant challenges for managing flu risk: STAT
US-China relations remain tense: Bloomberg
China to impose new visa restrictions on certain US citizens in Hong Kong: Reuters
US consumer spending bounced back in May despite a drop in incomes: Bloomberg
US Consumer Sentiment Index increases for the second consecutive month in June: MW
Peter C. Oppenheimer
Essay by author via Business Insider
Interestingly, over the decades, despite various circumstances, economic and market cycles have shown a tendency to repeat. In the last thirty years, we’ve experienced the collapse of the Soviet Union, significant declines in inflation and interest rates, the rise of the internet, and the digital transformation. Yet, cycles continue to manifest. Since 1880, there have been nearly 30 major bear markets, and 13 in the post-war era—roughly one every six years.
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Update: The spike in the daily report of US Covid-19 deaths on June 25 was attributed to New Jersey accounting for “1,854 probable deaths.” Excluding this adjustment, the downtrend in US fatalities appears to persist. This spike may not indicate a genuine increase. New data in the coming days and weeks will provide clarity regarding the situation. (Refer to the revised chart at the end of this post that omits the New Jersey adjustments.)
While reports indicate a rise in coronavirus cases across the US, mostly in southern and western states, this has been somewhat downplayed by the falling trend in fatalities. However, that narrative shifted dramatically after a notable spike in new deaths on Thursday, June 25.
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US Covid-19 cases have surged, breaking records for daily increases: Bloomberg
CDC reports that the estimate of Covid-19 cases in the US may be vastly underestimated: NBC
The Fed imposes new restrictions on banks following stress tests: CNBC
The Trump administration petitions the Supreme Court to invalidate Obamacare: Politico
The US is grappling with five significant crises: NY Times
World trade experiences an ‘unprecedented decline’ in April: CPB
Revised data shows that US GDP fell 5.0% in Q1, aligning with previous estimates: BEA
Durable goods orders in the US jumped nearly 16% in May: MW
Jobless claims in the US continue to escalate, rising by 1.48 million last week: CNBC
As US coronavirus cases rise, the fragile economic recovery faces potential setbacks. However, current equity factor strategies centered around growth and momentum remain strong, posting year-to-date gains. This conclusion is drawn from a set of exchange-traded funds through June 24.
The acceleration in US coronavirus cases is evident: WSJ
The three most populated states—TX, CA, and FL—are the epicenters of this resurgence: CNN
NY, NJ, and CT institute quarantines for travelers from high-risk states: CNN
Europe is contemplating barring US travelers as it reopens borders: CNBC
Trump considers relocating US troops from Germany to Poland: NPR
US economic recovery may be at risk as coronavirus cases rise: BBG
Analysts forecast that a second lockdown is unlikely in many countries despite the virus rebound: CNBC
Jobless claims remain high, as predicted in today’s update: MW
The daily report of US Covid-19 cases hit a two-month high: JHU
The future appears uncertain, particularly when predicting inflation trends. This sentiment is evident when comparing the implied forecasts from the Treasury market against estimates from several leading investment and consulting firms.
Fauci informs Congress that the virus remains uncontained amid rising case numbers: NY Times
The next few weeks are crucial for the coronavirus response, according to Fauci: AP
Europe may restrict US travelers due to the pandemic: CNN
A survey of economists shows that 73% anticipate a partial recovery for the US economy: FiveThirtyEight
A new US agency may provide billions for reshoring supply chains: Reuters
The US is contemplating new tariffs on imports from the UK and Europe: Bloomberg
German business sentiment rebounds sharply in June: Reuters
New home sales in the US surged in May: MW
The Richmond Fed Manufacturing Index shows recovery in June after a significant dip: RF
US economic contraction eases significantly in June: IHS Markit
Bonds are considered a primary option for mitigating tail risk in investment portfolios, and rightly so. However, relying solely on this approach offers only a partial solution and can yield varying levels of effectiveness over time.
In light of the challenges presented by the ongoing coronavirus pandemic, investors are navigating a complex landscape. The fluctuating sentiment surrounding markets underscores the importance of adjusting strategies to maintain resilience in an unpredictable environment. As the situation continues to evolve, close monitoring and informed decision-making will be crucial for successful investments moving forward.
