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The Best of What They Said and I Read Week Ending 7/5/2020

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice


Barron’s – July 2, 2020 – The Dow Gained 812 Points This Week.   Why Investors Should Fear the Wrong Kind of Rally. – Ben Levisohn

  • “…The Dow Jones Industrial Average rose 811.81 points, or 3.2%, to 25,827.36, while the S&P 500 gained 4%, to 3130.01, and the Nasdaq Composite climbed 4.6%, to 10,207.63, to close the week at an all-time high…the market’s good week followed a pretty bad one, which was preceded by a good one, which was preceded by a bad one. In fact, the S&P 500 has advanced just 1.6% since June 2, a reflection of the competing forces buffeting markets right now.”
  •  “On the negative side of the ledger, Covid-19 is still rising—a record 52,000 new cases were reported in one 24-hour period this past week, and not just because of more testing. And states continue to roll back or delay their reopenings, which will push back the recovery’s timeline.   On the positive side: The Federal Reserve is pumping money into the economy, the data have been better than expected—Friday’s June payrolls report, which showed 4.8 million jobs being added, is just the latest example—a Covid vaccine is being developed, and there’s still a good chance that Congress passes some sort of stimulus bill. Depending on the day, news on any one of these fronts could send the market higher or lower.”
  •   “…And history suggests that the stock market could continue to rally over the next few weeks. That’s because it tends to rally strongly from June 26 through July 11, Kolovos says, noting that the S&P 500 has averaged a 6.3% rise during that period. If it follows suit this year, the index could hit a new all-time high.  After that, the market tends to weaken, particularly in an election year. To avoid that, the market’s rally will need to broaden out from big tech stocks to everything else.”

  U.S. Global Investors – July 2, 2020 – Frank Holmes

  • “…Among the biggest American innovation success stories of the past few years has been Tesla. Shares of the electric vehicle (EV) and battery manufacturer soared past $1,200 this week and are now up close to 190 percent so far this year, making CEO Elon Musk $25.8 billion richer.  Thanks to a much better-than-expected second quarter—Tesla reported more than 90,000 vehicles sold in the same three months that major Detroit auto manufacturers reported dramatic sales declines—the Palo Alto-based company is now the world’s most valuable carmaker.”
  •  “…Gold futures rose above $1,800 an ounce for the first time since 2012 on June 30 and ended the second quarter with its best in four years. Bullion also had its longest streak of weekly gains since January, with the week ended June 26 being its third straight. Bank of America head of commodities and derivatives research Francisco Blanch raised his 18-month price target for gold to $3,000 an ounce.”
  • “…Dairy farmers continue to face a crisis after dumping millions of gallons of milk, slowing output and selling older cows. Despite receiving stimulus from governments worldwide, the money will dry up eventually. Bloomberg reports that dairy accounts for around 14 percent of the global agricultural trade and more than 150 million farmers keep at least one milk animal. With the pandemic raging on and restaurants closing or limiting operations, demand for dairy remains painfully low.”

 The Economist – June 27, 2020 – The rules of coronaspeak

  • “Necessity, they say, is the mother of invention.   Perhaps boredom is its father, and – in the world of language and its coinage – social media the incubator.   The coronavirus pandemic has produced a vast number of new terms, serious and (mostly) playful, to describe the predicaments of lockdown.”
  •  “Start with coronaverse, which people everywhere now inhabit, or the quarantimes, the era in which they now live.  Early fears of the total breakdown of society in a coronapocalypse have proved, thankfully, too pessimistic.  But viral anxiety reigns, as do complaints of Zoom fatigue.  Participants appear on screen for meetings with a quaransheen of unwashed sweat on their faces.   Feelings seem to be on an emotional coronacoaster.  Meanwhile, covidiots are spurning lockdown restrictions in ways likely to make the pandemic worse…At least there is a locktail hour at the end of the week (or, for many, at the end of most days).” 

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