Economic Outlook
The Outlook with the Dems in Control?
The Outlook with the Dems in Control? By Mitchell Anthony January 18, 2021 The Democrats have taken control of the Senate and hold it along with the house and the presidency. While a Biden victory was expected by many, control of the Senate by the Dems was unexpected by most investors and market strategists. Democrats have a history of taxing and spending that has frightened investors concerned about the fragile state of the US economy!Read moreMarkets Climb as Virus Containment Continues
Markets Climb as Virus Containment Continues Quarterly Review, October 7, 2020 By Mitchell Anthony The US equity markets had a terrific quarter despite the fact that little progress was achieved in containing the coronavirus. US Equities lead all asset classes in the 3rd quarter of 2020 with the S&P 500 advancing 9%, MACM’s Dynamic Growth Portfolio Advancing 12%, and MACM’s Diversified Equity portfolio advancing 13.7%. Foreign Equities lagged badly in the quarter likely due to the fact that the European economy has very little share of the globe’s big cap tech industry. Gold advanced 5.8% as the Fed adopted a posture of more accommodation and more patience with inflation. Real estate failed to follow through with further gains in the third quarter after significant gains in the second quarter. Generally most REITs were flat or up 1-2% in Q3. High quality fixed income investments were mostly flat for the quarter as prices began the quarter at historical highs with only a few rational reasons why investors might expect yields to decline further. Distressed debt performed a bit better as credit quality improved during the quarter given the feds intervention and Congress’s willingness to support distressed areas of the economy.Read moreTech Wins No Matter Who Wins Election?
Tech Wins No Matter Who Wins Election? By Mitchell Anthony September 30, 2020 With the election around the corner investors are getting nervous about the impact a Biden victory might have on the equity market and the leadership in the equity market. Thus far, since Washington, the Congress, and the central bank declared war on the pandemic, the equity market has roared and the leadership has been centered in technology stocks. The reason is simple - These companies are leveraging the current environment and have a tailwind at their back. Cyclical stocks like airlines, hotels, and restaurants have begun to recover but the outlook for them is still very uncertain and highly dependent upon the termination of the virus. This group may not win no matter who wins the election or conversely could win with either candidate based upon the virus outcome. However technology is likely to win no matter what the outcome of the virus is and no matter what the outcome of the election might be.Read moreElection Impact on Markets
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
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 moreHow 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 more