Heightened Volatility

Northern Trust
By July 27, 2020 14:51

Heightened Volatility

Just months after one of the sharpest drops ever, stock markets globally are nearing cycle highs as most economic data continues to show repair. Fiscal stimulus and income support programs have supported consumer spending over the last several months, as have lending programs to businesses intended to underpin employment. However, we remain concerned that continuing COVID-19 cases will blunt the pace of the current rebound. While most broad measures of growth are still rebounding firmly, there are signs of softening in areas like restaurant and airline bookings as well as retail sales. Even regions where the virus is well-controlled, like Hong Kong, are seeing the effects, as a small rise in virus cases led to the re-closing of Hong Kong Disneyland. In the U.S., California has responded to rising cases by cancelling in-person public schooling in Los Angeles and San Diego starting in August. So, is the market being irrational in continuing to advance in the face of these resurgent risks? Certainly, the stock market is not directly representative of the real economy. Many of the most affected industries, including retail, travel, and hospitality, are small parts of the market; while some of the greatest beneficiaries, such as the technology industry, are the largest. This can be illustrated by comparing the market cap-weighted S&P 

Northern Trust
By July 27, 2020 14:51


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🇺🇸S&P 500 Total Return Attribution

Multiple expansion explains the S&P 500's total return YTD, despite negative earnings growth 👉 https://www.isabelnet.com/?s=return

h/t @SoberLook #markets #investing #assetallocation #returns
#sp500 $spx $spy #stocks #earnings #EPS #stockmarket #equities

🇺🇸 S&P 500

Do valuations still matter? This chart puts into perspective the wide divergence between the S&P 500 and the US economy 👉 https://www.isabelnet.com/?s=S%26P+500

h/t @LanceRoberts #valuation #markets #investing #sp500
$spx #spx $spy #stocks #stockmarket #equities #GDP #economy

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July 2020