MidSouth Week in Review:
March 31, 2020

The S&P rose 10.3% for the week that saw the Dow rise 21% from Monday’s close through yesterday’s close.  A catalyst for the stock market rise was the unanimous passing of the economic rescue plan.  The plan would allow those with income below $75,000 to receive $1,200 and an additional $500 for every child age 16 or under.  The only problem is that the total cost of the plan represents around $6,000 per citizen.  The weakened economy has caused junk bond yields to soar:  American Airlines (17.9%), AMC (29.0%), Transocean (29.2%), Caesar’s Resort (29.0%).  Gold rose to its highest level since 2009.  According to a Department of Labor stat, a record 3.3 million American’s lost their jobs last week.  A City University survey found that nearly 30% of New York City residents have lost their job.  Ouch! – Sources: Wall Street Journal, New York Times

BuzzBits

Insider Buying – The current market panic had drawn the highest level of insider buying since the sub-prime crisis in November of 2008.  Insiders have always signaled when decent buying opportunities are present in equity markets - $ValuePlus

Coronavirus – Some people aren’t shaking hands because of the coronavirus.  I’m not shaking hands because everyone is out of toilet paper – Miles Long ……Toilet paper sales were up 60% for the week ending 3-7 – Wall Street Journal

The Down Year – There have been 16 down years in the stock market since 1945.  However, the year after the calendar year the market has averaged a return of 3.5 percentage points greater than the 75-year average annual return of 11.3% - BTN Research

Mortgage Refi’s – Wait!  If you’re thinking of taking out a mortgage or refinancing, wait a bit longer.  The plunge in Treasury bond yields hasn’t fully filtered through to the rate on home loans yet.  So far, mortgage rates have actually risen a bit rather than falling.  Chances are lenders haven’t yet had to adjust rates downward as they normally do because of extremely high demand for refinancing.  Once that surge ebbs, the rate you can snag ought to be considerably lower, under 3% for a 30-year fixed-rate loan – The Kiplinger Letter ….. Refi’s fell 29.4% last week.  Mortgage rates on 30-year mortgages dropped to 3.5% from 3.65% last week – Mortgage Bankers Association

The Bear Market – It took just 19 trading days for the Dow to drop 20% off its record high, representing the blue-chip index’s fastest move from a record high to a bear market since 1931 – MarketWatch.com …..The Dow registered a 23% gain from Monday’s low to Thursday’s high - Buzz

Hot Weather – Researchers at MIT found that most Coronavirus transmissions have occurred in regions with low temperatures between 37.4 and 62.6 fahrenheit, while countries in the southern hemisphere, with average temperatures above 64.4 degrees, account for fewer than 6% of global cases – New York Times

Network News – An average of 32.2 million watched the evening news last week, a 42% increase from last year.  There was a 67% increase among adults between ages of 25 to 54 – Nielsen

Halted Economic Activity – is causing many sectors such as hospitality, restaurants and aviation to have mass layoffs.  However, an uptick in demand in consumer staples has sparked a hiring spree.  Amazon plans to hire 100,000 employees, Walmart 150,000, Instacart 300,000, Dollar General 50,000, CVS 50,000, Kroger 10,000 and Domino’s 10,000 – Hustle

The NFL – Hopefully their season will not be affected by the Coronavirus.  However, the season has been expanded to 17 games from 16.  In 1961, their regular season games went from 12 to 14, then from 14 to 16 in 1978 – NFL Players Association

Bear Frequency – There have been 12 bear markets (down 20%+) since 1945,  with an average time to recover and make a new high of 24 months – BTN Research 

Restaurants – will be severely hurt by the coronavirus pandemic.  Americans now spend more at restaurants than at grocery stores.  More than 3 million waiters could lose their jobs overnight because margins are paper thin.  A New York Times article said that 75% of independent restaurants that have been closed to protect Americans from the Coronavirus won’t make it – TheAtlantic.com

Loneliness – Social isolation has been linked to a 50% increased risk of dementia, a 29% increased risk of heart disease and a 32% increased risk of a stroke.  Social isolation equals smoking 15 cigarettes a day and exceeds the risks associated with obesity, excessive alcohol consumption and lack of exercise.  What can you do to help?  Reach out to your neighbors and ask how they are doing, how you can assist in a big or small way.  Many will be struggling during the crisis.  They won’t have the help they need, the income or emotional support to get through it, so do whatever you can do to connect with friends and family – New York Times

Classic Dance Videos – These four videos are awesome, especially 1 and 2 – Buzz  https://youtu.be/lPj3SJcx0Wc

buzz@msifund.com

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