Notes on the Week Ahead

Washington Hawks flourished in the late 1970s and 1980s, when deficits and inflation were seen as significant threats to the nation. However, their numbers have dwindled in recent years due to persistent low inflation and the rise of populism. The current pandemic recession appears to have dealt a death blow to the species and its traditional habitat has now been taken over by swirling flocks of r...

The title of these weekly articles often starts with, “The Investment Implications of…..” This is usually appropriate since almost all big issues have investment implications and the focus of these articles has always been to see the investment environment with clarity.

Apparently, the hard-working analysts at the Congressional Budget Office threw in the towel on Friday afternoon. They were scheduled to release their estimates of the budget deficit for July but, late in the day, the CBO website announced that the numbers would be coming out today instead.

New GDP data released last week confirmed that the 2020 recession has been the deepest in over 70 years, with a peak-to-trough decline in real output of 10.6%. This, of course, was already evident in monthly data on consumption, employment, trade and inflation and has been reflected in a very sharp decline in corporate profits.

Last week, I was preparing for a zoom call with some of our client advisors at JPMorgan Asset Management, by reviewing a list of questions they had kindly supplied in advance, and I came across a particularly awkward one: what has been my biggest investment mistake?

In life before the pandemic, (and it seems like years ago), Sari and I would often drive from our home in Massachusetts to New York for the weekend. The destination was always fun – seeing the kids, exploring new restaurants, catching a Broadway show and sometimes running a road race the next morning to burn off the extra calories. But we had to get there first.

In the week ahead, as has been the case for most of the year, markets will likely take their cues from medical rather than economic data. The key question is whether America will see a second wave in the Covid-19 pandemic.  The answer to that question has, of course, profound human and social consequences.  However, it also has implications for the economy, for fiscal and monetary policy, and, ult...

In recent weeks, as stocks have rebounded strongly from their March lows, many have asked if the market has come too far, too fast. Thursday’s sharp selloff may have been an expression of that concern.

In the week ahead, America will be focused on the killing of George Floyd and its aftermath. These are difficult days for our country, beset as we are by a pandemic, a deep recession, political division and racial tension.

In the early days of her marriage, my mother tried to achieve the almost impossible goals established by society for a 1960s wife.  Apart from tending to the needs of my somewhat Victorian father, she did her best, on an inadequate allowance, to keep herself and a growing family fed and clothed. 

On Friday, the Bureau of Labor Statistics will release the Unemployment Rate for April, which will undoubtedly be the single ugliest economic statistic of my lifetime. We estimate that, based mainly on continuing unemployment claims, the number will come in at 15.5%. We also estimate that roughly 19 million Payroll Jobs were lost in the month.

In the classic Roadrunner skit, the Coyote buries one ACME box of dynamite beneath a pile of birdseed, strings the wires to a detonator hidden behind a rock, waits for our hero to arrive and start pecking, and then forcefully pushes down on the plunger.

Every summer when I was growing up, we would spend a week or two on holiday in the West of Ireland.  These trips would always start in discomfort, as I was one of a large number of children squished into the back of a small car. 

In this uniquely repetitive era for all of us, Saturday marked a first for my wife, Sari, and I. Armed with a sharp pair of scissors and with a manic gleam in her eye, she attacked the task of cutting my hair.

Last week, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a huge package of federal spending and tax cuts, primarily aimed at helping the economy weather the recession triggered by our “social distancing” response to the COVID-19 virus.

The problem with COVID-19 is that it is both sufficiently contagious and sufficiently lethal to exact a terrible human toll.  This toll, as can be seen from the mortality figures from China and Italy, can be made substantially worse when the health care system is overwhelmed.

The spread of COVID-19 continues to have a dramatic impact on lifestyles, economic activity, monetary and fiscal policy, and financial markets. 

2020 has quickly become the year of the virus. It should, of course, first be recognized that, for some families around the world today and, sadly probably many more in the months ahead, issues of economics, politics and finance will be but a small footnote to personal tragedy. 

Springing to life nearly a mile above sea level, the Zambezi River gathers strength, speed and tributaries for more than two hundred miles before hurtling over the Chavuma Falls in Western Zambia. 

Despite a strong January jobs report, real economic growth is continuing to decelerate in the first quarter of 2020 and could fall below 2% year-over-year for the first time since 2016.

Last week, I decided to avoid shaking anyone’s hand. It’s not that I have a virus.  It’s just that my job, which involves lots of plane travel and hand-shaking, make me particularly susceptible to getting one.  And I would really rather not be ill.

Among the card games of my misspent youth was a game called Pontoon. The rules of Pontoon are very similar to Blackjack – the object is to get as close to 21 as possible without going over.

On economic news, the December Jobs report generally suggested stable growth. The payroll job gain, at 145,000, was slightly weaker than consensus but not alarmingly so.

25 years ago, I had the privilege of working with a very smart and well-respected strategist at a Wall Street sell-side firm.

My wife, Sari, and I have a long-standing disagreement about how warm our home should be. I contend that a man shouldn’t have to wear an overcoat in his own house just to ward off frostbite.