Gibraltar Chronicle September 2020

Our latest article on the stock market, as published in the Gibraltar Chronicle.

Market Commentary September 2020

The stock market obliterated the “sell in May” maxim this summer. Anyone who “went away” missed out on some large gains. These gains came amid unprecedented economic pain, high unemployment, and rising COVID-19 cases. Looking past those massive challenges, investors focused on strengthening economic data, growing receptivity to wearing masks and maintaining social distancing, and steady progress on leading vaccine candidates. In a strange year, the stock market and economy are exiting summer with Brexit negotiations and US presidential electioneering firmly on the front pages. With the chances of a Brexit deal estimated to be as low as 30% and Joe Biden leading in the polls, it would not be surprising to see the stock market find direction one way or the other.

Gibraltar Chronicle August 2020

Our latest article on the stock market, as published in the Gibraltar Chronicle.

Market Commentary August 2020

Stock performance often seems uncoupled from key economic data and corporate earnings. In general, the stock market is anticipatory of what is to come, while economic data and earnings are lagging – the former by one month, the latter by three months. Thus, it is not uncommon for cyclical companies to be reporting their best earnings of the cycle amid strong data – just as the stock market begins to nosedive in anticipation of a slowdown or recession. And stocks may leap off their lows even amid a steady stream of dismal data. There is indeed an element of hope in the stock market’s anticipatory impulses. Never has that hope been so plainly in evidence as today as investors head into what looks to be an exceptionally weak second-quarter earnings season.

Gibraltar Chronicle July 2020

Our latest article on the stock market, as published in the Gibraltar Chronicle.

Market Commentary July 2020

The reopening of the economy is underway, and nothing – not even a fresh wave of COVID-19 infections – is likely to reverse it. With businesses reopening and consumers warily venturing out to restaurants, beaches and hair salons, the economic data is showing signs of ticking higher. The goal of the initial shutdown was never to stop the disease in its tracks. The goal was to flatten the curve so that the pace of new infections did not overwhelm the healthcare system. The economic stakes are too high to roll back the reopening and begin another shutdown. For all these reasons, the phased reopening of the economy will proceed.

Gibraltar Chronicle June 2020

Our latest article on the stock market, as published in the Gibraltar Chronicle.

Market Commentary June 2020

Stocks have staged a remarkable rebound over the past several weeks, despite dismal unemployment readings and declining profit expectations. Investor optimism appears to come in several forms: that job losses will be temporary and return quickly once lockdown restrictions are eased; that a relatively quick breakthrough on the health care front will occur to combat the virus through treatments or vaccines; and that monetary and fiscal stimulus will keep consumers and businesses afloat until the economy recovers. Another few things could be fuelling recent market psychology – a “worst-is-over” mentality that is bringing in substantial money from the sidelines; a “no-place-to-go-but-stocks” approach given record-low 10-year yields; and a “fear-of-missing-out” thinking that has investors worried about lagging performance.

Gibraltar Chronicle May 2020

Our latest article on the stock market, as published in the Gibraltar Chronicle.

Market Commentary May 2020

Will we ever get back to normal? COVID-19 is not just the worst pandemic in 100 years, but also the first pandemic of the information age. It also reflects a new kind of thinking, that it is worth stopping the global economy in order to minimise deaths. Perhaps the hyper-awareness wrought by social media in the digital age is why global leaders stopped the economy. The first steps on the long walk back from the pandemic have barely begun. And the likelihood is that the world we return to will be changed in fundamental ways.