Election Impact on Markets
August 3, 2020
Election Impact on Markets By Mitchell Anthony July 31, 2020 With the election on the horizon and the economy in recession it is certainly reasonable to think that a change of the Washington regime is possible, hence the impact on the economy and the financial markets must be evaluated. Historically changes in Washington regimes have occurred during periods of recession, or after substantial loss of confidence in the regime’s ability to get the US economy back on a path of growth. Further changes in the Washington regime have occasionally occurred because the majority believes that the current president is out of touch with the majority’s needs and desires. Sadly, America is sharply divided today and probably more than ever in its history. There is civil unrest to some degree across America in a small minority, and the economy is in recession as a result of Covid 19 virus. Is this recession and civil unrest enough to cause the majority to vote for change, and if so what will this mean to the US economy, financial markets, and MACM portfolios?Read moreMarkets Change Course as Virus Outlook Evolves
July 14, 2020
Markets Change Course as Virus Outlook Evolves By Mitchell Anthony The US economy and financial markets recovered in the second quarter of 2020 as the outlook for Covid 19 evolved. Authorities and regulators across America and the globe introduced and began executing plans for reopening their economies. Texas and Georgia were one of the first to reopen their economies but also the first to back peddle on reopening plans as the virus reemerged and cases accelerated. Clearly Covid 19 remains out of control despite the fact that the first efforts to control the virus in America were largely successful, however infections in America have reemerged at an alarming rate far above that of Europe and Asia. The death rate which had been tilting steadily lower for the last few months has now shown signs of tilting upward over the last few weeks. Consumers and investors are confused as conflicting views from highly respected experts continue to emerge about the outlook for containing the virus without shutting down the economy again.Read moreJune 16, 2020
How Do We Turn the Lights Back On? June 15, 2020 By Mitchel Anthony The financial markets have roared back 30 to 40% from pre-virus correction levels but have begun to struggle to move higher as investors assess the outlook for the US and global economies. The US economy has lost considerable ground and does not appear to have found a bottom yet. While the US economy is not roaring back to life like the equity markets, positive economic signs do seem to be on the horizon. This economy had been in an extended period of slow growth and we were likely only in the fifth or sixth inning of this ballgame when the virus hit. Now it is unclear whether the remaining innings will be played and we will get the lights back on the game or whether the game will be called because of the storm that has hit. Despite this investors have become optimistic and liquidity has returned to the equity markets. This recovery in the financial markets has been largely driven by strong messages of support for the US consumer and US business from the central bank, the U.S. Treasury, and the U.S. Congress. The Fed has said that they will use all tools available and will provide whatever liquidity is needed to the U.S. Treasury and the financial markets to avoid a collapse in the economy and attempt to ensure a quick recovery from the effects of the government ordered shutdown. Washington politicians have basically made the same statements. As a result optimism has abounded as the Fed has never been unsuccessful in the past.Read moreEquity Markets Nosedive as the Plug Is Pulled On the Economy
April 17, 2020
By Mitchell Anthony April 10, 2020 The S&P500 fell 19.6% in Q1 2020 compared to a loss of 11.1% for MACM’s Dynamic Growth Non-Qualified portfolio. The US Economy has deflated after orders from Washington and the States as the coronavirus rips its way across America and the globe. The US economy was unplugged just as stronger growth was beginning to emerge after a long period of modest growth since the great recession. Indeed pre-virus economic trends in the US economy were quite good. Housing was experiencing some of the best data it had seen in many quarters. Consumer spending on housing, digital devices, and experiences was accelerating. Energy prices were stable and the Fed’s balance sheet was declining. Employment was at all-time highs and mortgage delinquencies at all-time lows. Consumer confidence was near all-time highs and consumer balance sheets were strong. The banking system was solid and corporate America had healthy balance sheets. There was no overcapacity in the economy and asset prices were higher across almost all asset classes. So in other words a very bad time opportunistically to have shut down the economy.Read moreCoronavirus Forces Hand of Government Leaders
March 19, 2020
March 18, 2020 By Mitchell Anthony Unfortunately this virus and its ability to spread and penetrate the globe was misunderstood by us and by most investment managers worldwide. While the world watched selective footage of the virus grip China it was unclear what was being done in China to prevent and contain the spread of the virus and how America would have to react if the virus reached American shores. Historically coronaviruses that began in China never reached the rest of the globe in a significant manner. However this time the virus has spread quickly across the globe and threatens human life. As a result the globe has taken a very defensive posture against the virus. Government and corporate leaders across the globe have had to weigh the impact of the virus on human life versus the impact of extreme defense measures on economic activity. Thus far economic survival has fallen and given way to maintaining human health around the globe. Historically capitalists have sacrificed sometimes almost everything including health for economic and financial gain and prosperity, however in today’s world capitalism has fallen in rank dramatically to our current society’s goals about life and health for humanity. Read more