MidSouth Week in Review
June 10, 2020

Due to an unexpected good jobs report, the S&P rose 4.7% for the week and was the first time since 1982 that the market has been up 3%+ for three consecutive weeks.  From the March low, the S&P is up 46%.  Both the NASDAQ 100 and the NASDAQ made new Bull Market highs this week.  The 30-year Treasury bonds surged to a yield of 1.72%, possibly due to the Dollar hitting a 3-month low.  Crude had a record gain of 88% in May and was up 11% for the week in hitting $39.45.  Loan delinquencies rose to 7.4% in May from 2.3% in April.  The I.S.M. Factory Activity index rose to 43.1 in May from its 41.5 April low, which was the lowest reading since April 2009.  Sources:  Wall Street Journal and New York Times

BuzzBits

The 50-Day Rally – Through Wednesday, the S&P was up 37.3%, making it the benchmark index’s largest 50-day rally in history.  After the other largest 50-day rallies, stocks were up 100% of the time.  Six and twelve months later, the average 6-month return was 10.2%, while the average 1-year return was 17.3% - LPL Financial ….. Through today, the S&P is up 40.3% over the past 52 days.

Politics – is like being a football coach.  You have to be smart enough to understand the game and stupid enough to think it’s important – Eugene McCarthy

The White House Effect – The Schwab Center for Financial Research found that the market ended on a positive note in 17 of the past 23 president’s election years, or 74% of the time.

Ouch! – In Chicago last weekend, 82 were shot and 19 were killed.  17 of the homicides occurred on Sunday alone.  For the year, there have been 211 homicides in the city and only 13 of the deaths have been identified as white – Chicago Sun-Times

Zoom Video Communications – Because of the coronavirus pandemic, the stock has zoomed from 108 in April to reach a new high of $223 this week.  The company’s product portfolio includes zoom meetings that offers HD video, voice, chat and content sharing through mobile devices, laptops, telephone and conference room systems.  The stock currently sells at a price/earnings ratio of 1290 and is selling at 470x estimated earnings.  The Wednesday valuation for the company was $50 billion vs. $49.8 billion for the combined value of Southwest Air, Delta, United Air and American Airlines – Buzz

Colleges – Expect strong retail tactics to lure students as schools scramble to recruit both.  Worried high school students and millions of adults are now unemployed or unemployed due to the economic downturn.  After a decline in enrollment, there will likely be a surge at community colleges and elsewhere.  Look for an explosion of online options to generate new revenue – The Kiplinger Letter

The Personal Savings Rate – increased to 33% in April vs. 8% in February.  U.S. restaurant spending is down 30%, travel is down 80% and spending at movie theaters, sporting events and art festivals is down about 100% - Earnest Research survey ….. AMC theaters, the world’s largest theater chain said that substantial doubt exists about their ability to continue as a going concern – USA TODAY

Weight Gain – during the quarantine has averaged about 8 pounds, according to a WebMD survey.  Most (34%) gained 4 to 6 pounds, one-fifth (21%) gained 10 to 20 pounds and 4% gained 21+ pounds – USA TODAY ….. The percentage of adults considered obese increased from 30% to 42% between the 1999 period and 2017-2018 - CDC

Telehealth – has exploded over the past few months, with Blue Cross/Blue Shield of Tennessee paying out nearly 20 times as many telehealth claims as it did during the same period last year – The Beacon Letter

55 Years Ago – a 90-year-old woman screwed her lawyer.  Figuring 90-year-old Jeanne Calment wasn’t going to be around for long, he offered her $500 per month in return for her apartment upon her death.  At age 120, Calment wrote her lawyer, who was already out $180,000, on her birthday with the greeting, “Sorry I am still alive!”  She was the world’s oldest living person – New York Times ….. Ms. Calment died in Arles, France in 1997 at age 122.  Her attorney died in 1995.

Fashion Trends on Wall Street – There will be little change in men’s pockets this year – Wall Street Journal, 1948

Remote Work – could empower renters in New York City and San Francisco to finally buy homes, just not necessarily in those cities.  That could be good news for owning real estate and stock in companies such as RedFin and Zillow – Wall Street Journal

Washington, D.C. – A city of northern charm and Southern efficiency – John F. Kennedy

buzz@msifund.com

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