Cumberland Advisors Week in Review (Nov 16, 2020 – Nov 20, 2020)

Author: Cumberland Advisors, Post Date: November 21, 2020
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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.

Matt McAleer & Equities / ETFs
-Small caps continue to get a bid
-Barbells can be used with equities – I explain.
-We want to continue to stay flexible
-What will the third decade hold for us? Being flexible is our approach.
-Respect valuation and momentum.
-Broadening our view of what’s working needs to be respected
-See you next week!

 

John Mousseau & Fixed Income / Munis
-Update on Bond Market: Yield curve flattened this week
-COVID events taking a toll, bringing yields down a bit
-Higher than expected jobless claims this week
-Munis: Big demand, yields down, last stretch of supply, some deals 15-20 times oversubscribed
-NJ Bonds were in demand: 25B in orders for a supply of 4B. That is a lot of demand for a pandemicly affected security.
-There is an ongoing demand for yield out there, even for pandemicly affected issuers if the price is right.
-What’s hanging over the Muni Market? Discussions between Fed Chairman Powell and Treasury Secretary Steven Mnuchin.
-Mnuchin would like to wind down some programs, I explain.
-Important thing to remember: The Muni Market is functioning great. Not many issuers have has to go to the municipal liquidity authority.
-If there is any back-off in the Muni Market, it’s probably a good opportunity to buy some bonds at higher yields
-We wish you the best of holidays

 

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/C0yVJZ39rNc

 

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
-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) 257-7013Other 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/

Cumberland Advisors In The News

Patricia Healy Featured
CUMBERLAND COMMENT: Government employment falls
Nov 16, 2020

The positive jobs growth news, showing an increase of 638,000 jobs in October and a full 1 percent reduction in the unemployment rate to 6.9%, masked a decline in government employment. Private jobs were up by 906,000, led by an increase of 271,000 in hospitality and leisure, a sector that has been hit particularly hard by pandemic shutdowns. Government jobs, however, fell by 268,000. The majority of the losses were in state and local education, 61,000 and 98,000, respectively. The loss of 147,000 temporary 2020 census workers contributed to a net loss in federal employment of 138,000. The loss of public education jobs as well as private education job losses of 21,500 is likely reflective of the extent of remote learning and the reduced need for support staff.

State and local employment constitute 13% of the total non-farm payroll, and slow growth in state and local employment after last decade’s financial crisis contributed to a slow recovery.

Full article: https://www.heraldtribune.com/story/business/briefs/2020/11/16/patricia-healy-government-employment-falls/6248751002/


John Mousseau Quoted
Muni yields fall as new-issues oversubscribed; ICI reports inflows
Nov 18, 2020 – By Chip Barnett, Christine Albano

Dan Urbanowicz, director and fixed income portfolio manager at Washington Crossing Advisors said “following-through on the $38 billion in orders for New Jersey’s GO deal yesterday, most of the new issues today, including Massachusetts GO, are oversubscribed and repricing 5 to 10 basis points lower in yield.”

Elsewhere, market technicals are being impacted by the COVID-19 climate.

“We’re seeing a renewed supply/demand imbalance in the market,” he said.

The significant oversubscription was a sign of the times, according to John Mousseau, president of Cumberland Advisors.

“Pandemically affected yield sells,” he said after the pricing.

Full article (Paywall): https://www.bondbuyer.com/news/muni-yields-fall-new-issues-oversubscribed-inflows-return


David R. Kotok Quoted
The US economy is about to shrink, JPMorgan warns
Nov 20, 2020 – By Matt Egan, CNN Business

The federal government can’t agree on how to treat the renewed economic weakness. Republicans and Democrats have repeatedly failed to reach a deal on new fiscal relief, setting up a scenario where 12 million Americans could lose benefits by the end of the year.

“Congress has failed the country,” said David Kotok, chief investment officer of Cumberland Advisors.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, slammed Congress for an “appalling dereliction of duty.”

The Treasury Department added to the mess Thursday by yanking $455 billion of funds the Federal Reserve was using for emergency lending programs. The Fed issued a statement opposing the move, marking a rare public dispute between the central bank and Treasury Department -— in the middle of a crisis, no less.

Treasury Secretary Steven Mnuchin said those funds can be used by Congress to stimulate the economy, but there’s no guarantee a deal can be reached there. And this is a bizarre time to remove ammo the Fed is using to fight the crisis.

“Trump would have signed a bill pre-election. Now he is unpredictable and our national government seems to be in chaos,” Kotok said.

Full article: https://www.kitv.com/story/42943947/the-us-economy-is-about-to-shrink-jpmorgan-warns


David R. Kotok Cited
USF Nursing Course to Address Covid-19, Burnout
Nov 20, 2020 -By Hannah Wallace

This February, the USF College of Nursing will offer a series of virtual courses for frontline nurses about staying safe and healthy—both physically and mentally—while working in a pandemic. “Frontline Nursing During Covid-19: A New Paradigm” will address pandemic-related concerns like Covid-19 pathology, self-care and risk-mitigation, empowerment and self-advocacy, identifying limitations and asking for help.

The continuing-education webinars will be made available free for registrants throughout the country, thanks to a donation from Sarasota’s David Kotok and Christine Schlesinger. Nurses who complete the program will be eligible for continuing-education credits, which are a necessary part of license renewal.

Full article: https://www.sarasotamagazine.com/health-and-fitness/2020/11/usf-nursing-course-to-address-covid-19-burnout


John Mousseau Quoted
Holiday calendar slumps to $1.2B; munis firm after week-long rally
Nov 20, 2020 – By Chip Barnett, Christine Albano

The long end of the municipal market firmed Friday as the expected new-issue calendar slipped to about $1 billion for the Thanksgiving-shortened trading week.

Yields on top-rated bonds fell about a basis point on AAA scales as yields fell about eight to 13 basis points in total since Nov. 13.

Treasury yields slipped as stocks turned mixed Friday while the markets watched the disagreements between the White House and the Federal Reserve over emergency lending programs such as the Municipal Liquidity Facility.

“The market is in full holiday mode,” John Mousseau, president of Cumberland Advisors, said Friday, noting the $3.7 billion New Jersey general obligation deal had tremendous follow-through when it broke free to trade Thursday but otherwise munis were quiet..

“Most people are looking to the period after Thanksgiving,” to get back into the market when new issuance picks up between then and the next holiday season, Mousseau said.

Full article (Paywall): https://www.bondbuyer.com/news/holiday-calendar-slumps-to-1-2b-munis-firm-after-week-long-rally


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/


COVID, COVID, COVID! Recovery?

Author: David R. Kotok, Post Date: November 20, 2020
Cumberland Advisors Market Commentary - COVID, COVID, COVID! Recovery  

A Bleak Short-Term COVID Outlook, Then Recovery Dawns Fact is, during the darkest hours before light breaks, dawn is already racing toward us across the surface of the turning world. That’s an image – a reassuring metaphor – that can sustain us now. America’s darkest hours in the COVID-19 pandemic lie just ahead, over the […]


Hurricanes, Bob Bunting, CAC

Author: Bob Bunting, Post Date: November 18, 2020
Bob Bunting - CEO, Climate Adaptation Center (CAC)  

Municipal bond ratings are affected by the preparedness of the issuers for severe weather, the impacts of climate change, and other factors that may affect credit ratings. Cumberland Advisors takes a keen interest in the micro and macro details surrounding municipalities and weather events. Our colleague Bob Bunting, meteorologist, professor, and former executive at both […]


Will the NASDAQ Crash? Also: Helping Nurses!

Author: David R. Kotok, Post Date: November 16, 2020
Market Commentary - Cumberland Advisors - Will the NASDAQ Crash? - Also Helping Nurses!  

Will the NASDAQ crash? We get that question often. Here’s a Bloomberg discussion on that subject and a Bloomberg chart comparing the NASDAQ bubble 20 years ago with the NASDAQ spike this year: “Nasdaq-100 Stumbles Near Dot-Com Era Record Versus Dow,” https://theonedave.tumblr.com/post/634605567333236737/nasdaq-100-stumbles-near-dot-com-era-record-versus. And here’s a Cumberland commentary we wrote at the peak of the NASDAQ […]


Flying to Florida

Author: , Post Date: November 15, 2020
Market Commentary - Cumberland Advisors - Flying to Florida  

Investors and clients ask about the transportation sector and specifically airlines.  The outlook is dependent on travelers’ perceived personal safety (COVID vaccines and treatment options) in addition to economic recovery that can generate the incomes to cover the costs.  There isn’t much more we can add to that investment perspective. We do field direct questions […]


Municipal Employment

Author: Patricia Healy, CFA, Post Date: November 12, 2020

Market Commentary - Cumberland Advisors - Municipal Employment - Patricia Healy, CFAThe positive jobs growth news, showing an increase of 638,000 jobs in October and a full one percent reduction in the unemployment rate to 6.9%, masked a decline in government employment. Private jobs were up by 906,000, led by an increase of 271,000 in hospitality and leisure, a sector that has been hit particularly hard […]


11-11-11

Author: David R. Kotok, Post Date: November 11, 2020

Field-of-poppies-blooming-red-1280x720

On November 11, 1918, President Woodrow Wilson signed the agreement that ended the fighting in World War 1, a conflict that engulfed 30 nations and cost millions of lives (estimates vary). In June of 1919, the Treaty of Versailles would attempt to forge the terms of the peace. Months later, on November 11, 1919, Wilson […]


Singles’ Day and Alibaba

Author: Leo Chen, Ph.D., Post Date: November 10, 2020

Market Commentary - Cumberland Advisors - Singles’ Day and Alibaba (Leo Chen)

November 11 is Singles’ Day in China. It is an unofficial shopping holiday that was started by Alibaba in 2009. It is called Singles’ Day because the repeated number “1” in “11.11” refers to single people in Chinese. Although Singles’ Day is often compared to Black Friday in the US, it is actually more similar […]


China Update – Ant Versus the State

Author: William Witherell, Ph.D., Post Date: November 9, 2020

Cumberland Advisors Market Commentary by William "Bill" Witherell, Ph.D.

Last week, the Ant Group was expected to list in Shanghai and Hong Kong the largest IPO in history. However, on Tuesday, November 3, the Shanghai Stock Exchange announced it had postponed the company’s listing, citing “major issues” that might cause it “not to meet the listing conditions or disclosure requirements.” The IPO listing was […]


Hurricane Roxcy or Hurricane Bob?

Author: , Post Date: November 8, 2020
Hurricane Roxcy or Hurricane Bob

 

“Biden’s proposals to increase taxes on the wealthy and corporations – not to mention a $2 trillion plan to fight climate change – would stand virtually no chance in a Mitch McConnell-led Republican Senate” (https://www.bloomberg.com/news/newsletters/2020-11-05/a-biden-agenda-might-stall-before-it-starts).  Let’s devote Sunday to the climate. Climate change is a big agenda item for Biden & Co. But a gridlocked […]


Electoral College Timeline

Author: David R. Kotok, Post Date: November 6, 2020

Here’s the link to the Congressional Research Service report on the Electoral College timeline. Hat tip Politico. https://crsreports.congress.gov/product/pdf/IF/IF11641 David R. Kotok Chairman of the Board & Chief Investment Officer Email | Bio Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and […]


Wave Bye to Blue Wave – Bonds

Author: John R. Mousseau, CFA, Post Date: November 4, 2020

Market Commentary - Cumberland Advisors - Wave Bye to Blue Wave – Bonds

Though we are still sorting out last night’s election, the so-called “blue wave” of a Democratic sweep of the White House, Senate, and House of Representatives didn’t happen. At this hour, the White House is still not decided; it appears the Senate will NOT switch and will stay Republican; and the Republicans made a few […]


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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.

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Cumberland Advisors® is registered with the SEC under the Investment Advisers Act of 1940. All information contained herein is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services. Such an offer can only be made in the states where Cumberland Advisors is either registered or is a Notice Filer or where an exemption from such registration or filing is available. New accounts will not be accepted unless and until all local regulations have been satisfied. This presentation does not purport to be a complete description of our performance or investment services. Please feel free to forward our commentaries (with proper attribution) to others who may be interested. It is not our intention to state or imply in any manner that past results and profitability is an indication of future performance. All material presented is compiled from sources believed to be reliable. However, accuracy cannot be guaranteed.
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