MidSouth Week in Review
September 01, 2020

The S&P was up 3.2% for the week in making new closing highs everyday this week.  U.S. consumer spending increased more than expected in July, boosting expectations for a sharp rebound in economic growth in the 3Q.  The Fed announced that they expect to keep short-term interest rates near zero for five+ years.  30-year mortgage rates declined to 2.91% vs. 2.99% last week vs. 3.58% a year ago.  July new-home sales jumped by 13.9%, exceeding analysts’ expectations.  Because four of the five largest refineries were located near the path of Hurricane Laura, wholesale gas prices surged to $1.40+ before retracting to the $1.24 level today.  Lumber surged to 866 this week before declining 13% to 750.  Consumer confidence dropped in August for the second consecutive month as a resurgence in coronavirus infections eroded hopes for a strong economic rebound.  – Sources:  Wall Street Journal and New York Times

BuzzBits

A Wild Ride – The S&P was down 30.4% year-to-date in March but is now up 60% over the past 113 days.  There have been six bear markets over the past 75 years that have registered 30% + declines and in each case roared back 100%+ over an average period of 43 months – BTN Research ….. The NASDAQ is up 30% year-to-date with just five stocks representing 40% of the cap weighted return – NASDAQ

Misers – aren’t fun to live with, but they make wonderful ancestors – Susan Tarpy

Stock Market Performance – annualized under six scenarios going back to 1933: Republican sweep +13%, Rep. President/Split Congress +6%, Rep. President/Dem. Congress +5%, Democratic Sweep +9%, Dem. President/Split Congress +14%, Dem. President/Rep. Congress +13% – RBC Capital Markets 

BREAKING NEWS!  – The Chicago Police Department has replaced all sirens with the National Anthem to force suspects to stop running and take a knee …...  The 443 homicides recorded in Chicago through July were a 53% increase.  New York City, with 3x the population of Chicago, has had just 244 murders.  In July, 565 were shot in Chicago and at least 63 were juveniles.  Police have seized 6,400 guns year-to-date - TIME

Required Minimum Distribution – from IRA’s, 401(k)’s and certain other workplace retirement plans are waived for 2020 – Kiplinger’s Personal Finance Advisor

Working At Home – A KPMG survey of workers found that 79% believe the quality of their work has improved and 67% believe their work-life balance has gotten better and 55% would like to have the flexibility to continue working remotely at least part of the time – Consumer Affairs ….. About 37% of U.S. jobs could be one from home full-time – The Kiplinger Letter

The Big Spread – Brokerage firms money market funds now have an average yield of only 0.05% with many having to waive charges to prevent the yields from dropping below zero.  However they make it up on their interest charges on margin accounts.  Rate charges on $25,000+ loan balances: Interactive Brokers 1.59%, E-trade 8.45%, Fidelity 7.82%, Schwab 7.82%, TD Ameritrade 9.00% - Wall Street Journal

Ouch! – Luxury Hotels have seen their revenue per available room plunge 81% in the 2Q vs. a 21% decline in the 1Q.  Marriott had a 93% revenue decline in the 2Q from their luxury hotels which had a daily room rate of $293 – Wall Street Journal

Young Investors – Never confuse brilliance on your part with a bull market – Robert McAleer

Greenland’s Ice - is nearly two miles thick in places and if all the ice were to melt, sea levels would rise about 24 feet.  That would take centuries.  Since the 1990’s the Artic has warmed faster than any part of the planet causing sea levels to rise about one-quarter inch per decade – New York Times

On This Date – in 1907, “American Messenger Company” was started by two teenagers, Jim Casey and Claude Ryan.  The company’s name was later changed to “United Parcel Service.” - PLANSPONSOR

Mental Health – A 2015 study reported that those who were lonely and isolated had a 30% higher risk of death, and a substantial increase in anxiety, depression, substance abuse, and domestic violence.  Another study found that two months after the coronavirus stay home orders, 56% reported negative mental health symptoms, including worry, stress, alcohol use and changes in sleeping and eating – JAMA Internal Medicine

More Idiots

Millennial Math – My husband and I went through the McDonald’s

drivethrough window and I gave the cashier a $5 bill.  Our total was $4.25,

so I also handed her 25 cents.  She said, “you gave me too much money.” 

I said, “Yes I know, but this way you can just give me a dollar back.” 

She sighed and went to get the manager who asked me to repeat my request. 

I did so, and he handed me back the 25 cents, and said “We’re sorry but

we don’t do that kind of thing.”  The cashier then proceeded to give me

back 75 cents in change.  Do not confuse the people at MacD’s – Anon

Media analyst Mark Dice offers random people their choice of a Hershey
chocolate bar or a 10-oz. silver bar (worth $230 Canadian today;
1/28/2020 US price would be $175 ) in an experiment. And remember, these
are the people who are going to be voting for a new president this year.

buzz@msifund.com

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