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.
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.
Thank you for joining Cumberland Advisors for this end-of-week update on market conditions, bonds & equities with John Mousseau, CFA. John is holding down the fort while I’m out of the office this Friday.
John Mousseau on Fixed Income / Munis & Markets
-Still don’t know who’s President. What do we know? No “Blue Wave” and the probability of “divided government.”
-Divided government means, probably, less spending overall and less inflation pressure
-In muniland, supply was low this week because of the rush in supply in October
-A growing list of states approved marijuana-related ballot measures. Why? Tax revenue.
-Some good economic news: this week initial jobless claims down, unemployment drops below 7% to 6.9%.
-How about The Fed? In an anticipated divided government climate, Fed Chair Jay Powell stands ready to use his tools and prod the government for a second stimulus bill.
-Next year we anticipate more consumer spending as pandemic problems wane. Americans have been saving throughout 2020.
-This increased spending rate may bring about increased inflation, something to watch for in 2021.
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/xEcUnsnhj9Q
Also, please mark you calendars for Tuesday, November 17, 2020 between Noon and 1:30 pm for a lively and informative virtual discussion on “Post-Election Financial Markets” with a panel of professionals from the University of South Florida Sarasota-Manatee campus and Cumberland Advisors. John and I will be featured panelists along with others from our firm including David R. Kotok, Robert A. Eisenbeis, PhD, Patricia M. Healy, CFA, Bill Witherell, PhD, and Leo Chen, PhD.
Stay safe, healthy, and have a great weekend.
-Matt McAleer & Cumberland Advisors
Matt enjoys your feedback. You can reach him at:
-Link to Matt’s Email: Matthew.McAleer@Cumber.com
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-Call Matt: (800) 257-7013
Other questions or comments? Email us at firstname.lastname@example.org or give us a call at (800) 257-7013.
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The Philadelphia Inquirer quotes David R. Kotok
Wall St. betting on Biden win, GOP Senate, smaller stimulus
November 05, 2020
Muni bonds: “As the economy improves and we get to a vaccine, we should see higher (interest) rates no matter who is finally elected President,” wrote David Kotok, municipal bond and fixed income investor with Cumberland Advisors. For now, however, interest rates remain low.
“Munis should be fine,” he wrote, although these bonds “will probably not get a tax-increase boost right away, from a demand/supply standpoint they are in very good shape.”
Until a second stimulus bill passes Congress, “we may see some additional actions from the Federal Reserve to shore up markets if needed. We also expect further jawboning from the Fed to Congress on the importance of additional stimulus.”
Barron’s quotes John Mousseau, CFA
Fed In Holding Pattern Amid Tense US Election
October 31, 2020
While the Fed moved quickly with new credit lines and the rate cut as the pandemic arrived, the initial momentum to get aid bills through Congress has petered out despite increasingly desperate pleas for more aid from Fed Chair Jerome Powell.
John Mousseau, president and chief executive officer at Cumberland Advisors, said the central bank is likely to again encourage lawmakers to continue the push for new stimulus after the election in the final weeks before a new Congress is installed in January.
“The Fed has done their job,” he said.
And as they call for more aid next week “the message will be delivered to a lame duck Congress that might actually act on what the Fed’s doing.”
CNN Business quotes David R. Kotok
The 2000 recount was a mess. A contested election now would be much scarier for Wall Street
November 02, 2020
“The biggest risk to markets is a violent response to whatever Tuesday night and Wednesday bring,” said David Kotok, chief investment officer of Cumberland Advisors. “Markets don’t like violence.”
In anticipation of possible post-election unrest, some retailers in New York City and Washington have boarded up store windows. Federal authorities are also expected to install a “non-scalable” fence around the perimeter of the White House.
Sarasota Herald Tribune features Robert Eisenbeis, Ph.D.
CUMBERLAND COMMENT: Where do we stand on jobs?
November 02, 2020
Both the economy and the job situation have been radically impacted by the COVID-19 pandemic. In the first quarter of 2020, real GDP declined at an annual rate of -5 %, largely as a result of the first surge of COVID cases in March, when the pandemic began to have a real impact on economic activity. Corporate profits declined by $37.5 billion, and the first round of job losses – over 1.3 million – occurred in March.
The decline in the second-quarter GDP of -31.4 % was even more dramatic and was accompanied by a drop in the PCE price index to 1.6% and by the loss of 20.8 million jobs in April. Rounding out the third quarter, only 7.5 million of those job losses were reversed in May and June. The Bureau of Economic Analysis just released its first estimate of third quarter GDP growth, which came in at an annualized rate of 33.1%. Job numbers in Q3 did rebound but only another 3.9 million were recovered in the third quarter, indicating that the virus continued to impact activity in the third quarter.
Bloomberg quotes David R. Kotok – Video
Stocks Rallying Because Election ‘Squashed Chaos’: Kotok
November 04, 2020
David Kotok, Cumberland Advisors chairman and chief investment officer, says stocks are rallying because the results of the 2020 presidential election has given investors the calm they’ve been thirsting for. He speaks during an interview on “Election 2020: Ballot Breakdown.”
Sarasota Magazine mentions Cumberland Advisors
USF Will Host Panel on Post-Election Financial Markets
November 06, 2020
To help sort through the election results and guide investors through these uncertain times, the University of South Florida will host a virtual panel discussion on financial markets on Nov. 17 from noon-1:30 p.m. Experts from the Sarasota-Manatee campus within the USF Muma College of Business and Sarasota-based Cumberland Advisors will share their expertise and insights to guide investment strategies.
The Bond Buyer quotes John Mousseau, CFA
Munis mixed as elections, FOMC, jobs data loom large over trading week
November 02, 2020
Last Friday was just a typical end-of-the-week session, with no tricks or treats for municipal investors as the market remained quiet ahead of the election, said John Mousseau, president of Cumberland Advisors.
“It was a good time to buy issues in the past few weeks because we know issuers were coming to market to beat the election.” He said this was especially true due to “memories of volatility and the sell-off from four years ago.”
Mousseau noted there were good buying opportunities in recent weeks, however, visible supply has noticeable decreased to $5 billion from $20 billion.
“We will see some reversion to the mean, of course, but this should revert to a sellers market,” he said.
Speak French? LesAffaires.com quotes Robert Eisenbeis Ph.D.
La Fed se réunira au lendemain de l’élection présidentielle
November 02, 2020
Il se pourrait cependant qu’aucune décision ne soit annoncée jeudi, à l’issue de la réunion de deux jours.
« La concomitance de la réunion avec l’élection américaine et la détérioration de la situation sanitaire joueront en faveur d’une approche attentiste », estime Gregory Daco, d’Oxford Economics.
« Ils vont attendre de voir ce qui se passe. Je ne pense pas qu’ils fassent une quelconque annonce dans la foulée d’une élection », a également déclaré à l’AFP Robert Eisenbeis, responsable de la politique monétaire chez le gestionnaire de portefeuille Cumberland.
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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.