Cumberland Advisors Week in Review (Aug 31, 2020 – Sept 04, 2020)

The Cumberland Advisors Week in Review is a recap of news, commentary, and opinion from our team.

Week In Review

These are not revised assessments, and circumstances may have changed in the market from the time of original publication. We also include older commentaries that our editors have determined may be of interest to our audience. Your feedback is always welcome.

CUMBERLAND ADVISORS’ WEEKLY RECAP

As part of Cumberland Advisors’ continuous effort to maintain strong customer relationships, we offer this week’s short video discussing current market conditions and how we are positioning portfolios.

Dear Clients & Friends,

Thank you for joining Cumberland Advisors for this end-of-week update on market conditions, bonds & equities with Matt McAleer and John Mousseau, CFA.

This week:

Matt McAleer on ETFs & Equities

-Good dose of volatility this week
-Pullback on Thursday/Friday in S&P 500 & NASDAQ
-In prior video we mention that the “air” had gotten a little thin
-We noticed speculative put/call ratios being blown out on the call side
-Wednesday, we acted on a sell signal in our volatility strategies (these are short term trading strategies)
-It worked out well (doesn’t always, did this time)
-Pullbacks are not unexpected
-We have cash at various levels depending on the strategies
-We want to buy strong trends on pullbacks, so we look for opportunities relating to our “want to buy” equity & ETF list
-We want to see a shift of risk-reward in our favor – Matt explains
-Japan has traded well after a 25 year nap
-China? Politics aside we look at them as an index of companies and their risk-reward opportunities
Impressive employment report
-Reminder: We don’t trade the economy, we trade securities.
-One doesn’t fall in line with the other but we want to analyze what each are doing
-Have a great Labor Day weekend!

 

John Mousseau’s Update on the Fixed Income Market

-10 & 30yr bonds up 6 & 7 basis pts today alone reflecting good numbers today
-Better than expected unemployment numbers
-Lots of work left to be done
-Muni yields up a little this week
-Barron’s article this week outlined some muni challenges ahead
-We expect to see a stimulus bill from congress at some point

-A vaccine will change the perception of growth rates going forward
-Vaccine may be as early as November
-We’re looking next week at CPI, PPI, and initial jobless claims, hoping for positive trends

Please reach out with any questions/comments you may have about this update; we appreciate your calls, comments, and emails. Watch in the player above or at this link: https://youtu.be/6YIrnu4BWdc

Stay safe, healthy, and have a great Labor Day weekend.

-Matt McAleer & Cumberland Advisors

Matt enjoys your feedback. You can reach him at:
-Link to Matt’s Email: Matthew.McAleer@Cumber.com
-Link to Matt’s Twitter: https://twitter.com/MattMcAleer4
-Link to Matt’s LinkedIn: https://www.linkedin.com/in/matthew-c-mcaleer/
-Call Matt: (800) 257-7013

Other questions or comments? Email us at info@cumber.com or give us a call at (800) 257-7013.

Contact Matt or any one of our advisors by following this link: https://www.cumber.com/our-people/


IN THE NEWS

Cumberland Advisors In The News

WaPo – In a bleak economy, these companies are flourishing

Quoted: David R. Kotok | Posted on: 08/15/2020 read more

Camp Kotok: Maine Woods, Economists & Wine

Quoted: David R. Kotok | Posted on: 08/08/2020 read more


Cumberland Advisors Market Commentary

Cumberland Advisors Market Commentary offers insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies. Our readers appreciate its timeliness, depth of analysis, and quality of research.

To read current and past commentaries, visit https://www.cumber.com/category/market-commentary/


Crown Fires

Author: David R. Kotok, Post Date: September 3, 2020

Cumberland Advisors Market Commentary - Crown Fires

A COVID-19 resurgence seems about to begin. Schools reopening will be one of the vectors.  Please take time to listen to this August 27 podcast by Dr. Michael Osterholm, director of CIDRAP, the University of Minnesota’s Center for Infectious Disease Research and Policy. He entitles this episode “Crazy Days,” after the title of a song, […]


Living with Risk: The COVID-19 Iceberg

Author: , Post Date: August 31, 2020

Market Commentary - Cumberland Advisors - Living with Risk The COVID-19 Iceberg

Steve Sexauer and I spent about an hour discussing a superb paper he coauthored with Laurence Siegel. I recommend it to readers. It will give investors and decision makers some perspective on how to navigate through the COVID-19 shock and out the other side. Here’s the link. https://blogs.cfainstitute.org/investor/2020/08/20/living-with-risk-the-covid-19-iceberg/ Below is an excerpt that the authors […]


Why the US has a COVID Data Crisis

Author: David R. Kotok, Post Date: August 30, 2020

Cumberland Advisors Market Commentary - Why the US has a COVID Data Crisis

Congratulations to all. We’ve now endured and survived two political conventions. According to various pollsters, we’re mostly unchanged in our political views. We have witnessed two starkly contrasting and totally scripted messages. And we’ve had two hurricanes and massive wildfires, on top of COVID-19, to remind us that Mother Nature ignores politicians. We humans are […]


FOMC and Revisions to Its Longer-Run Policy Strategy

Author: Robert Eisenbeis, Ph.D., Post Date: August 28, 2020

Market Commentary - Cumberland Advisors - FOMC and Revisions to Its Longer-Run Policy Strategy

On the day of Chairman Powell’s opening speech for this year’s virtual annual Jackson Hole Economic Policy Symposium, hosted by the Kansas City Fed, the Federal Reserve released an update to its January 2012 “Statement on Longer-Run Goals and Monetary Policy Strategy.” This commentary describes the changes in the strategy and discusses what may be […]


Hurricanes

Author: David R. Kotok, Post Date: August 27, 2020

David R. Kotok

In the Indian Ocean they are called cyclones, in the Pacific Ocean, typhoons. The latter term comes from the Chinese tai fung, which translates as “great wind.” The Kʼicheʼ Mayans called their god of wind, storm, and fire Hurakan. European colonists adopted the word, and it became hurricane. (Source: A Furious Sky: The Five-Hundred-Year History of America’s […]


Insider Trading—What Does It Tell Us?*

Author: Leo Chen, Ph.D., Post Date: August 26, 2020

Market Commentary - Cumberland Advisors - Insider Trading (Leo Chen)

Insider trading often refers to acting on material nonpublic information. However, when company employees buy and sell their own stocks, it is also called insider trading, which is permitted by the SEC. We will only discuss the second type of insider trading today. As many investors have wondered, is it a fair game for outsiders […]


LIBOR vs. SOFR

Author: David R. Kotok, Post Date: August 24, 2020

Market Commentary - Cumberland Advisors - LIBOR vs. SOFR

My friend Christopher Whalen has written an excellent commentary on the ongoing debate about LIBOR versus SOFR (the secured overnight funding rate). Here’s the link to his publicly available essay: https://www.theinstitutionalriskanalyst.com/post/libor-is-dead-long-live-sofr-really. We recommend Chris’s analysis as a “five-star must-read” for any investor, banker, credit officer, analyst, or student of monetary economics and policy. LIBOR still […]


Beveridge Curves

Author: David R. Kotok, Post Date: August 23, 2020

Beveridge Curves Aug 2020

 

We’ve prepared a series of Beveridge curve graphics so that readers can see the dramatic changes in the composition and direction of various labor-force-related measures. We are using a visual Beveridge curve approach. The charts (30 of them) are available from our website. Below is the link. https://cumber.com/pdf/Beveridge-Curves-Covid-Aug-2020.pdf The 30 charts are graphic and dramatic […]


Japan’s Economy, Stocks, and Corporate Governance

Author: William Witherell, Ph.D., Post Date: August 20, 2020
Market Commentary - Cumberland Advisors - Japan’s Economy, Stocks, and Corporate Governance

The Japanese economy, the globe’s third largest (following those of the US and China), shrank by a record 7.8% in the second quarter. This decline was less than the 9.5% fall in the US economy and the 10.1% drop in the German economy. However, it was more than double neighboring South Korea’s 3.3% drop. Taiwan’s […]


Inflation?

Author: Robert Eisenbeis, Ph.D., Post Date: August 19, 2020
Cumberland Advisors' Robert "Bob" Eisenbeis, Ph.D.

During an August 14, 2020, lecture at the Center for Financial Stability, Charles Goodhart (former member of the Bank of England’s Monetary Policy Committee and professor at the London School of Economics) mused about the US’s current economic slowdown and the prospects for inflation that might result because of the extraordinary increase in the money […]


Rare Earth Rewind

Rare earth minerals have been getting a lot of attention lately. We looked at this area of high potential in the 2018 market commentary, “Marcus Island.”

Marcus Island & Rare Earth Minerals

Originally published April 2018 – An isolated Pacific island barely big enough to accommodate an airstrip has gained global importance. Some 787 miles east of South Iwo Jima, Marcus Island, or as the Japanese call it, Minami-Tori-shima (also spelled, “Minamitori”), meaning “Southern Bird Island,” is the southernmost island under Japanese governance and within the Japanese economic security zone. In its history Marcus Island has been under American sovereignty and governance and Japanese sovereignty and governance. So why is this fleck of land in the vast Pacific now so important?

Rare earth minerals. Full story: https://www.cumber.com/marcus-island/


 

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Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.