Gibraltar Chronicle November 2020

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

Market Commentary November 2020

The COVID-19 pandemic has achieved another grim milestone with the global number of coronavirus cases exceeding 50 million. US data is troubling, while trends in Europe are flat-out alarming. The new wave of infection worldwide has followed relaxation of lockdowns on restaurants, bars and other gathering spots along with the natural inclination to move indoors as colder weather arrives. Fortunately, fatalities are not fully tracking the rise in new cases. But governments want to get ahead of the curve before it worsens with further lockdowns and tightening restrictions that were eased just months ago. Amid widely disparate commentary from health professionals, Dr Anthony Fauci, one of the US’s top infectious disease doctors, has argued that national lockdowns are not the optimal way to combat the disease. Instead, he argues that citizens should maintain proven public-health measures such as masking and social distancing “to help us safely get to where we want to go.” With the devastating effect lockdowns have had on the economy, we could
not agree more.

Gibraltar Chronicle October 2020

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

Market Commentary October 2020

The financial pain of the pandemic has mainly focused on those least able to afford it – low-wage workers in people-facing industries, such as restaurant workers, airline employees and physical trainers. Knowledge workers, who have been able to continue working from home, have been less affected by the shutdown. Indeed, this group of workers has benefited – not from higher wages, but from sharply reduced costs. Without being able to spend their salaries, their saving rates have rocketed. Increasingly, reporters have adopted the term “K-shaped recovery” to describe this disparate experience of those at the top and bottom of the economy. The structure of the letter ‘K’ lends itself to this analogy, as the fortunes of those on the upward thrusting arm of the letter diverge from those on the downward-sloping leg. It is certainly a more apt analogy than that provided by, say, a V-shaped recovery, with its assumption that we are all in this together. Given that the stock market is experiencing its worst case of indigestion since March, the message is simple: the economy – and by extension the stock market – cannot flourish if a large segment of the population is left behind.

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.