Daily Covid and Markets Podcast - Tuesday June 2
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 2 June 2020
⏱️ 20 minutes
🔗️ Recording | Apple Podcasts | RSS
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Summary
Early on in the COVID affair my general feeling was that the most ignored yet needed data point was the recovery rate, as first three people I knew tested positive and quickly recovered, then eight, then twenty, then ~thirty, etc. The key timing issue was that a significant portion of the people I knew early on that tested positive were already recovered by the time they got their test results, as back then getting the test, and getting the results, had a nearly ten day lag from the time one initially had symptoms bad enough to warrant getting tested. Here we are nearly three months later and I am sure we have less of a percentage who already recovered by the time they get test results (because of improved testing), but I still strongly suspect “recoveries” are rampant (we intuitively know this, and empirically know it), yet the data has either no way to capture it, or a big lag in capturing it.
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:12.5 | Hello, welcome to today's COVID and markets submissive, brought to you by the Dividing Cafe of the Bonson Group. |
| 0:18.6 | This is David Bonson, the chief investment officer at the |
| 0:21.0 | Bonson Group. It's Tuesday, June 2nd, and we're giving you our daily missive. And it's another |
| 0:26.5 | day of, I think a lot of people just perplexed at the market, bullishness, market forward |
| 0:33.4 | movement. And we're not perplexed by it here at the Bonson group. It's surprising in the sense |
| 0:43.8 | of normal intuitions about headlines and about news events, but in terms of how markets work |
| 0:53.3 | and what markets are actually doing mathematically |
| 0:56.7 | and economically, despite the really severe distress of the headlines and the TV screens, |
| 1:07.0 | it actually is not a surprise that markets are somewhat divorced from that activity. |
| 1:12.7 | So last night I went to bed and literally all that was on the TV was more coverage of property destruction and vehicular attacks on police and, you know, all the different things that we're all seeing on our TV images. |
| 1:26.7 | And yet futures were up about 200 points. And, and, uh, when, when I, when I, when I woke up this |
| 1:33.7 | morning, that is, futures were up about 200 points. They stayed up throughout the day as |
| 1:38.0 | the market was open, not necessarily that much all day, but then in the final hour, it rallied |
| 1:42.3 | and closed at the high of the day up 270 points. |
| 1:45.6 | And so, you know, we're getting even closer to that 26,000 mark in the Dow. |
| 1:50.4 | And all this is happening behind the backdrop of the things I've been talking about, |
| 1:55.5 | which is in the very short term, the market's responding to the juxtaposition of improved health data with improved economic |
| 2:04.7 | data expectations as the economy reopens and phases into its reopening with the ongoing |
| 2:14.1 | thus far benign health environment relative to expectations. And I'm going to share some |
| 2:21.6 | of that data with you momentarily. Second issue with markets is the monetary stimulus, |
| 2:28.3 | having worked its way through credit markets, brought in high yield and investment grade credit spreads, brought |
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