Keep Climbing

361 Capital Market Commentary | April 27th, 2020

As COVID-19 datapoints and scientific advances continue to surprise, the markets climb higher. Transmission rates, Remdesivir, macaque monkeys, Governor Andrew Cuomo, high-flow nasal cannulas, Pepcid, and pulse oximeters had no common thread six months ago. Now these once unrelated items can rapidly move the value of your investment portfolio higher or lower on a daily basis. While I am surprised by the +25% bounce off the March lows, I am also surprised at the flattening of the COVID case curves as well as the daily discoveries by the science and medical community. And don’t forget the Hulk (aka Jerome Powell) at the helm of the Fed lifting up every asset that was set to fall. If the progress in science continues, there is no reason that we couldn’t easily make new highs in U.S. equities. And since 9 out of 10 of us don’t expect it to happen, it of course will.

I have taken a three-armed barbell approach to investing in the markets over the last month. With part of the portfolio, I have built stakes in companies that I believe will do better under this new post-COVID world that we will be living in. So, think about the winners from staying closer to home more, and all of the implications of eating, working, and shopping under your roof. Then, I have also built a part of the portfolio with companies which could rip higher as the economy re-emerges and consumers, companies and governments start spending again. So, think about the healthcare and infrastructure spending winners, plus some areas of the consumer economy whose stocks I feel have been way oversold and that consumers cannot do without. Finally, there is a part of the portfolio in which I feel the Fed and the Treasury will do everything to make sure the companies succeed and not stumble. By being everyone’s backstop, these companies will win by their clients and customers not losing. Also, I still want to own a slug of gold and the miners as a hedge against the ongoing stacking of trillions of dollars onto our annual deficit and borrowings. As for shorts, I still have my lists of companies who I think will have a difficult 12-18 months, but I am weary of shorting anything given the focus of the Fed and Treasury on rescuing everything.

In the race toward a COVID-19 vaccine, Oxford University is wearing Usain Bolt’s cleats…

In the worldwide race for a vaccine to stop the coronavirus, the laboratory sprinting fastest is at Oxford University.

Most other teams have had to start with small clinical trials of a few hundred participants to demonstrate safety. But scientists at the university’s Jenner Institute had a running start on a vaccine, having proved in previous trials that similar inoculations — including one last year against an earlier coronavirus — were harmless to humans.

That has enabled them to leap ahead and schedule tests of their new coronavirus vaccine involving more than 6,000 people by the end of next month, hoping to show not only that it is safe, but also that it works.

The Oxford scientists now say that with an emergency approval from regulators, the first few million doses of their vaccine could be available by September — at least several months ahead of any of the other announced efforts — if it proves to be effective.

Now, they have received promising news suggesting that it might.

Scientists at the National Institutes of Health’s Rocky Mountain Laboratory in Montana last month inoculated six rhesus macaque monkeys with single doses of the Oxford vaccine. The animals were then exposed to heavy quantities of the virus that is causing the pandemic — exposure that had consistently sickened other monkeys in the lab. But more than 28 days later all six were healthy, said Vincent Munster, the researcher who conducted the test.


Who wants to tell General Motors that we found something better than ventilators?

Doctors at the University of Chicago Medicine are seeing “truly remarkable” results using high-flow nasal cannulas rather than ventilators and intubation to treat some COVID-19 patients.
High-flow nasal cannulas are non-invasive nasal prongs that sit below the nostrils and blow large volumes of warm, humidified oxygen into the nose and lungs.

A team from UChicago Medicine’s emergency room took dozens of COVID-19 patients who were in respiratory distress and gave them the cannula treatments instead of putting them on ventilators. The patients all fared extremely well, and only one of them required intubation after 10 days.

“The success we’ve had has been truly remarkable,” said Michael O’Connor, UChicago Medicine’s director of Critical Care Medicine.

The cannulas are often combined with prone positioning, a technique where patients lay on their stomachs to aid breathing. Together, they’ve helped UChicago Medicine doctors avoid dozens of intubations and have decreased the chances of bad outcomes for COVID-19 patients, said Thomas Spiegel, medical director of UChicago Medicine’s Emergency Department.

“The proning and the high-flow nasal cannulas combined have brought patient oxygen levels from around 40% to 80% and 90%, so it’s been fascinating and wonderful to see,” Spiegel said.


It looks like the heartburn medicine, Pepcid, might slow or stop the replication of the COVID-19 virus…

The virus was killing as many as one out of five patients older than 80. Patients of all ages with hypertension and chronic obstructive pulmonary disease were faring poorly. Callahan and his Chinese colleagues got curious about why many of the survivors tended to be poor. “Why are these elderly peasants not dying?” he asks.

In reviewing 6212 COVID-19 patient records, the doctors noticed that many survivors had been suffering from chronic heartburn and were on famotidine rather than more-expensive omeprazole (Prilosec), the medicine of choice both in the United States and among wealthier Chinese. Hospitalized COVID-19 patients on famotidine appeared to be dying at a rate of about 14% compared with 27% for those not on the drug, although the analysis was crude and the result was not statistically significant.


If you are over sixty years old and worried about getting the virus, go buy a pulse oximeter and start monitoring yourself daily…

There is a way we could identify more patients who have Covid pneumonia sooner and treat them more effectively — and it would not require waiting for a coronavirus test at a hospital or doctor’s office. It requires detecting silent hypoxia early through a common medical device that can be purchased without a prescription at most pharmacies: a pulse oximeter.

Pulse oximetry is no more complicated than using a thermometer. These small devices turn on with one button and are placed on a fingertip. In a few seconds, two numbers are displayed: oxygen saturation and pulse rate. Pulse oximeters are extremely reliable in detecting oxygenation problems and elevated heart rates.

Pulse oximeters helped save the lives of two emergency physicians I know, alerting them early on to the need for treatment. When they noticed their oxygen levels declining, both went to the hospital and recovered (though one waited longer and required more treatment). Detection of hypoxia, early treatment and close monitoring apparently also worked for Boris Johnson, the British prime minister.

Widespread pulse oximetry screening for Covid pneumonia — whether people check themselves on home devices or go to clinics or doctors’ offices — could provide an early warning system for the kinds of breathing problems associated with Covid pneumonia.


If the research on sunlight holds true, expect a run on patio furniture and indoor grow light bulbs…

NBACC's Emerging Results
Since our publication, we have read a Department of Homeland Security Science and Technology document (here) that reports on the direct testing of virus stability based on sunlight, temperature and humidity. The most striking finding in the document is that sunlight destroys the virus very quickly, within ~2 minutes. This may make sunlight exposure the most important factor to consider for a limited reopening of the economy, i.e., specific businesses and activities.


Another plug for outdoor patio furniture, outdoor dining, outdoor classrooms and popping the roof off your house…

Background: By early April 2020, the COVID-19 pandemic had infected nearly one million people and had spread to nearly all countries worldwide. It is essential to understand where and how SARS-CoV-2 is transmitted. Methods: Case reports were extracted from the local Municipal Health Commissions of 320 prefectural cities (municipalities) in China, not including Hubei province, between 4 January and 11 February 2020. We identified all outbreaks involving three or more cases and reviewed the major characteristics of the enclosed spaces in which the outbreaks were reported and associated indoor environmental issues. Results: Three hundred and eighteen outbreaks with three or more cases were identified, involving 1245 confirmed cases in 120 prefectural cities. We divided the venues in which the outbreaks occurred into six categories: homes, transport, food, entertainment, shopping, and miscellaneous. Among the identified outbreaks, 53.8% involved three cases, 26.4% involved four cases, and only 1.6% involved ten or more cases. Home outbreaks were the dominant category (254 of 318 outbreaks; 79.9%), followed by transport (108; 34.0%; note that many outbreaks involved more than one venue category). Most home outbreaks involved three to five cases. We identified only a single outbreak in an outdoor environment, which involved two cases. Conclusions: All identified outbreaks of three or more cases occurred in an indoor environment, which confirms that sharing indoor space is a major SARS-CoV-2 infection risk.


Looks like New York City is going to win the U.S. race to herd immunity…

It would be ironic if the state of Kentucky needed to ask New York City for medical and equipment help with COVID-19 later this year.

Antibody Study


While the scientists do their work, the smartest philanthropist on our globe is turning 100% of his funding and attention toward defeating COVID-19…

Bill Gates says his foundation, the world’s wealthiest charity, will give its “total attention” to the Covid-19 pandemic — even at the risk that its other public health work will suffer.In a telephone interview from his Seattle base, Mr Gates said the Bill & Melinda Gates Foundation, which has an endowment of more than $40bn, would focus its resources on a pandemic which he fears will cost the global economy “tens of trillions of dollars.”

“You’re going to have economies with greatly reduced activity levels for years,” Mr Gates said. “So-called ‘animal spirits’ are going to be hard to find, other than government largesse. We’re definitely in the tens [of trillions], which blows the mind. If you’d asked me six months ago, I wouldn’t have thought that was possible.”


Here is a good, long read from Bill Gates that will answer many of your COVID-19 questions…

Every week, you will be reading about new treatment ideas that are being tried out, but most of them will fail. Still, I am optimistic that some of these treatments will meaningfully reduce the disease burden. Some will be easier to deliver in rich countries than developing countries, and some will take time to scale. A number of these could be available by the summer or fall.

If in the spring of 2021 people are going to big public events—like a game or concert in a stadium—it will be because we have a miraculous treatment that made people feel confident about going out again. It’s hard to know precisely what the threshold is, but I suspect it is something like 95 percent; that is, we need a treatment that is 95 percent effective in order for people to feel safe in big public gatherings. Although it is possible that a combination of treatments will have over 95 percent effectiveness, it’s not likely, so we can’t count on it. If our best treatments reduce the deaths by less than 95 percent, then we will still need a vaccine before we can go back to normal…

Most developed countries will be moving into the second phase of the epidemic in the next two months. In one sense, it is easy to describe this next phase. It is semi-normal. People can go out, but not as often, and not to crowded places. Picture restaurants that only seat people at every other table, and airplanes where every middle seat is empty. Schools are open, but you can’t fill a stadium with 70,000 people. People are working some and spending some of their earnings, but not as much as they were before the pandemic. In short, times are abnormal but not as abnormal as during the first phase.


The New York Times also had an extremely good, long read this weekend discussing many big issues about how we will recover from the virus…

Until a vaccine or another protective measure emerges, there is no scenario, epidemiologists agreed, in which it is safe for that many people to suddenly come out of hiding. If Americans pour back out in force, all will appear quiet for perhaps three weeks.

Then the emergency rooms will get busy again.

“There’s this magical thinking saying, ‘We’re all going to hunker down for a while and then the vaccine we need will be available,’” said Dr. Peter J. Hotez, dean of the National School of Tropical Medicine at Baylor College of Medicine.

In his wildly popular March 19 article in Medium, “Coronavirus: The Hammer and the Dance,” Tomas Pueyo correctly predicted the national lockdown, which he called the hammer, and said it would lead to a new phase, which he called the dance, in which essential parts of the economy could reopen, including some schools and some factories with skeleton crews.

Every epidemiological model envisions something like the dance. Each assumes the virus will blossom every time too many hosts emerge and force another lockdown. Then the cycle repeats. On the models, the curves of rising and falling deaths resemble a row of shark teeth.

Surges are inevitable, the models predict, even when stadiums, churches, theaters, bars and restaurants remain closed, all travelers from abroad are quarantined for 14 days, and domestic travel is tightly restricted to prevent high-intensity areas from reinfecting low-intensity ones.


It will be difficult for restaurants to make a profit under the new COVID re-opening restrictions…

Here is a small part of the Anchorage, Alaska restrictions as they begin to re-open this week.

Required Safety Measures


Every live sporting event crowd is about to look like a Los Angeles Dodgers game in the first inning…

@darrenrovell: Is this the ticket seating map of the near future? Social distancing makes seats in white and gray unsellable, adjacent seats must be bought by people who are known to each other (H/T @JabariJYoung)

Los Angeles Dodgers

High-density office spaces are also going to have to be radically re-worked…

@gcaw: In March, 43.5% of workers on a South Korean call center floor were infected with #COVID19. Look how the cases cluster in a packed indoor space, and spare others not in the same space. This is the Broad Street pump map for the 21st century.


High Density Office Spaces

HVAC sales calls to reconstruct indoor spaces will also be in demand…

COVID-19 Outbreak Associated with Air Conditioning in Restaurant, Guangzhou, China, 2020
Abstract: During January 26–February 10, 2020, an outbreak of 2019 novel coronavirus disease in an air-conditioned restaurant in Guangzhou, China, involved 3 family clusters. The airflow direction was consistent with droplet transmission. To prevent the spread of the virus in restaurants, we recommend increasing the distance between tables and improving ventilation.


Reconstructed Indoor Spaces

Agree strongly with what Jennifer Rubin writes here. So many businesses will see greatly reduced or no traffic until we have a vaccine or widely available and highly accurate antibody testing…

Even if New York’s plan and those put out by states such as Maryland come off without a hitch, they will take weeks, if not months, to ramp up, subject to any setbacks (e.g., a second wave). These states are coming to grips with the reality that much of life will not change to something approximating “normal” before we get a vaccine. You likely will not enter a store without a mask, sit in a crowded movie theater or restaurant, or fly on a plane. Before there is a vaccine, you might not go to a gym, the beach or a mall — no matter what the social distancing. If you are working from home now, you may very well still be working from home six months or a year from now. Moreover, your employer may eventually decide the business can lease half the space it currently does and have you work from home permanently.

Students at K-12 schools and at colleges may go through a full year in which they never physically meet a teacher or attend a school play or an athletic event in person. Instead of live theater, concerts and sports, we might get our entertainment in a pay-per-view format. Movie theaters were dying off anyway with streaming services and big home televisions; most of the rest may vanish as well. Don’t bank on watching a summer blockbuster movie in a theater. How many of these entertainment venues will disappear permanently is unknowable.


The U.S. should be following Israel’s lead here…

Roadwork is booming in Israel as construction crews take advantage of empty roads and railways in the time of coronavirus to upgrade the developed world’s most congested highways.

Many countries have debated whether to keep up construction amid fears of spreading the infection, but Israel, spotting a chance early on in its battle with the outbreak, took the risk and kept labourers deployed with masks and social distancing.

The government injected over 1 billion shekels ($280 million) into the impromptu campaign and for nearly two months companies have been cramming in the work while the rest of the country is stuck at home. One recruitment campaign is referred to as “Opportunity in the Crisis.”


Don’t fight the Fed. Don’t fight the Fed. Don’t fight the Fed…

Ex-Fed member Kocherlakota argues for taking rates negative at this week’s FOMC meeting. For those trying to short the U.S. stock market, here is the 800-pound bazooka aimed at your head.

Unprecedented situations require unprecedented actions. That’s why the U.S. Federal Reserve should fight a rapidly deepening recession by taking interest rates below zero for the first time ever.When Fed officials hold their regular policy-making meeting next week, all the lights on their dashboard will be flashing red. The unemployment rate is expected to reach double digits by June. With global demand cratering, the Fed’s preferred measure of inflation will likely fall to 1% or even lower by the end of the year — well below its target of 2%. And in the absence of a Covid-19 vaccine, the malaise will likely persist well into 2021.


Yes. Noted…

Tweet from @WillieDelwiche

Jared is correct…

Again, put your personal feelings aside. We are not going to let things fail in this country. We will throw gobs of money at it, literally infinite amounts of money so things don’t fail. All this discussion about a retest…really the only way that happens is if we get the proverbial second wave of infections, and we fail to flatten the curve, but there is no indication that is going to happen.(Jared Dillian, The Daily Dirtnap)

Marko Lolanovic at J.P. Morgan also has strong thoughts about the Fed’s actions and implications for the stock market…

“The combined suppression of the risk free rate and credit spreads by the Fed likely has a bigger positive impact on equity valuation, compared with the negative impact of the temporary earnings loss,” Kolanovic wrote in note that explored what stimulus would mean for companies over six, 12 and 18 months. “Given the massive suppression of the discounting rate, the present value of future earnings in all three earnings impact scenarios is above the pre-crisis level. This indicates that the S&P 500 should attain previous all-time highs if the monetary measures are sustained.”(Bloomberg)

The second bazooka aimed at the shorts is the U.S. Government willing to bail out any industry that looks wobbly…

Here is a great read on the disastrous situation that was facing Carnival Cruise lines last month until the Fed came to the markets’ rescue.

It was mid-March and the vultures were circling Carnival Corp., the largest cruise-line operator in the world.The company, forced to virtually shut down by the coronavirus outbreak, needed billions of dollars fast. With financial markets frozen, executives were forced to consider a high-interest loan from a band of hedge funds who called themselves “the consortium.” The group included Apollo Management Group, Elliott Management Corp. and other distressed-debt investors that sometimes take over the companies they lend to, people familiar with the matter said.

That all changed on March 23 when the Federal Reserve defibrillated bond markets with an unprecedented lending program. Within days, Carnival’s investment bankers at JPMorgan Chase & Co. were talking to conventional investors such as AllianceBernstein Holding and Vanguard Group about a deal. By April 1, the company had raised almost $6 billion in bond markets, paying rates far below those executives had discussed just days earlier.


Knowing that the Fed has the economy’s back has led to investors returning to all areas of investment assets…

Investors are snapping up complex securities linked to some of the markets deemed most vulnerable to the coronavirus-driven economic slump, a sign that the yearslong reach for yield has survived the market shock.Faced with withering share prices and falling yields on safe government bonds, portfolio managers are seeking out returns in an array of strategies that in some instances take them into esoteric corners of the financial markets. One popular spot is the market for asset-backed securities, typically bonds whose payments to investors are generated by the cash flows collected from a large pool of car loans, property leases or other agreements.

Despite worries about a recession ahead and falling consumer spending, demand for bonds backed by U.S. auto loans has outstripped supply in recent days, bankers and investors said. A $1 billion bond marketed this month by Santander Consumer USA was sold at yields lower than initially expected, people familiar with the deal said.

In another closely watched deal, Dell Technologies Inc. last week sold approximately $1.1 billion in debt backed by leases on equipment to big and small companies across the country, including computers and servers. Meanwhile, sales of so-called structured products geared toward individual investors—including bets on stocks repackaged into bonds—hit a decade high in March.


Will the U.S. bailout the energy industry?

Senators from oil-producing states, including Ted Cruz of Texas, are imploring the US government to include domestic energy producers in credit facilities for failing companies. A letter they sent on Tuesday said it could be the difference between “maintaining our domestic energy production” and “shedding more US jobs and returning to dependence on foreign sources of oil”.Support of some kind now looks inevitable. But whatever form it takes, the retreat of the US oil sector looks likely to be every bit as stunning as its rise in recent years.

American production reached almost 13m barrels at the end of 2019 — the third year of increases that allowed the US, on its own, to meet the total additional annual oil needs of an expanding global economy. Since 2008, American oil production has more than doubled.

But output will be down to 11m b/d by 2021, according to the US Energy Information Administration. Scott Sheffield, head of Pioneer Natural Resources, one of the biggest shale producers in the US, told the Financial Times ahead of the US-brokered Saudi-Russia deal that at $10 a barrel, production would fall to 7m b/d — implying a drop greater than the total produced by Iraq, Opec’s second-biggest producer. Even at $35 a barrel, output would end up 3m b/d lower, said Mr Sheffield.

That would be a serious blow to an industry that Mr Trump heralded in January’s State of the Union address for having made the country “energy independent”. By April, with prices in a tailspin, the EIA forecast that the US would “return to being a net importer of crude oil and petroleum products in the third quarter of 2020”.


Negative oil prices are a boom to China’s economy…

Crude oil is one of the largest import items for China – $239bn or 12% of Chinese total imports of goods in 2019. Historical data show that the value of crude oil imports tracks Brent prices closely with a one-month lag. This implies a significant drop – roughly $10bn per month – in Chinese imports of crude oil in April and May, even after taking into account additional restocking demand induced by the lower prices. At an annualized rate, this represents 80bp of the Chinese GDP.
(Goldman Sachs)

Offshore oil activity is at 20-year lows as future development activity halts…

Investors should prepare for new offshore activity to effectively halt from here as we see the lowest levels of new capacity additions since 1999, fewer than 20 new projects, and the ‘backlog’ of production under construction – i.e ‘in progress’ future supply – falling to levels not seen since 2009. This 20-yr low-point is both a blessing and a curse as activity metrics will fall across the board, but the prospect of a future oil shortfall gets stronger

The halt in activity happened too deep for Diamond Offshore…

Diamond Offshore Drilling Inc., the rig contractor controlled by Loews Corp., filed for bankruptcy amid an unprecedented crash in crude prices that’s wrecking demand for oil exploration at sea.The company listed $5.8 billion of assets and $2.6 billion of debt in a Chapter 11 petition filed in Houston, citing year-end 2019 data. It has about $434.9 million of cash on hand, according to the document.

Diamond owns rigs that can drill in water more than two miles deep. But offshore oil is among the most expensive to produce, putting the company at a disadvantage when prices plunged to less than $30 a barrel.

While newer deepwater projects are less expensive, they still take longer to develop than shale wells and they still can’t compete on costs. What’s more, a global glut of offshore vessels has squeezed profit margins.

Conditions worsened “precipitously in recent months,” the company said, citing a price war between OPEC and Russia and the Covid-19 pandemic. With cash running short, the Houston-based company led by Chief Executive Officer Marc Edwards skipped a semiannual interest payment due April 15 on some of its senior notes.


Another week of terrible Jobless Claims…

Now how quickly can we reverse this number as many states begin to return to work this week?

US Initial Jobless Claims

An interesting look at where activity slowed and grew as we ‘Sheltered in Place’…

Change in electricity consumption

Good data for future auto demand and usage…

@LynAldenContact: Wuhan traffic is starting to look less like a zombie apocalypse. Weekend traffic remains very low. People are back to work commutes but not the discretionary enjoyment trips.

Congestion Level

So, are stocks begging to be bought?

Tweet from @bespokeinvest

Has the run in mega caps versus small caps hit a ceiling?


Will growth stocks stop beating up value stocks?

Growth vs. Value

Has everyone gotten maximum defensively positioned yet?

EvercoreISI Equity Sector Allocation Survey

The pair trade looks obvious, but can you stomach the risk and volatility that will likely ensue the minute you put it on?

Polarization in sector dominance

Energy stocks have disconnected from the commodity. Likely a good sign…

I have looked to play this by picking up the highest quality balance sheets with big dividends (which I fully expect to get cut). If oil and gas prices continue to get wrecked, then I expect the Highlander thesis to play out and the few names left will divide up the profits. With the big dividends, I get paid to wait.


Cheerios with oatmilk and blackberries is now my power lunch…

I would not want to bet against this group of stocks given all the tailwinds at their backs right now

Packaged-foods stocks have rallied nearly 25% since the market’s March 23 lows, in line with the broader indexes, and more gains for the group could be in store. Food stocks are trading at a 13% discount to their historic price/earnings ratios, compared with the S&P 500, which fetches a 15% premium to its historic P/E.

If food stocks can regain a market valuation, investors will realize appetizing gains. And if the group can achieve its historic 10% to 20% premium to the market—not a farfetched possibility in a post-Covid-19 world—the shares could rise 30% from their recent levels.

Behind the sector’s latest gains is explosive volume growth: U.S. packaged-foods sales jumped 32%, year over year, for the week ended March 28, and 24% for the week ended April 4. While the initial Covid-19 bump has faded, the numbers still look strong.

A shift away from restaurant spending is largely responsible for this surge . Restaurant traffic has fallen about 60% since the coronavirus outbreak in the U.S., according to Jeff Farmer, an analyst at Gordon Haskett. Before the outbreak of Covid-19, the disease caused by the virus, Americans ate about five meals a week away from home. Assuming that they now have only two restaurant-prepared meals each week out of a total 21, the number of meals cooked at home has risen to 19 from 16, an increase around 20%.

Groceries have also gotten more expensive, as demand has risen and supply in some places has become constrained. “No one is promoting,” says Karen Short, an analyst at Barclays who covers big-box grocers, including Costco Wholesale (COST), Walmart (WMT), and Target (TGT). “Everything is full-price.”

And, in yet another surprising turn, large brands are elbowing out private-label, or store brands, which grew to nearly 25% of total U.S. unit sales in recent years. In part, that’s because big food companies have the resources to help supermarket chains stock their shelves as home deliveries of groceries soar.


An Appetizing Quintet

Further helping the consumer food stocks is decade-low grain prices…

Corn Testing 13-Year Lows

Agree 100%…

The Fed is backstopping most all of the banks’ lending assets. And the banks are very well capitalized. The stocks should do well at these prices.

Famed investor Steve Eisman, a senior portfolio manager at Neuberger Berman who profited off of the 2008 housing crisis by shorting subprime mortgage loans, now sees opportunity in large US banks.

In an appearance on CNBC’s Fast Money on Thursday evening, Eisman said, “I actually think long-term, the best cyclical play out there are the very large banks.”

Eisman said that because of the regulations placed on banks after the 2008 crisis, they are now well capitalized to weather the coronavirus pandemic and “are fine.” Eisman didn’t specify which bank stocks he owned.

Year-to-date, US bank stocks as measured by the SPDR S&P Bank ETF, ticker KBE, are down 42%.



Peak earnings for the S&P 500 this week…

And for only the 2nd time ever in the market, the five largest market cap stocks will all report in the same week: GOOGL, FB, MSFT, AMZN & AAPL.
Most Anticipated Earnings Releases

Forward-earnings estimates have not hit bottom yet, but their second derivative has turned positive…

Tweet from @EarningsScout

California has a great idea that should be copied nationwide…

Gov. Gavin Newsom said the state will soon launch a far-reaching program to provide three meals a day to California seniors in need during the COVID-19 pandemic, partnering with local officials to employ out-of-work restaurant workers with funding largely provided by the federal government.“This partnership will allow for the ability for restaurants to start rehiring people, or keep people currently employed, and start preparing meals — three meals a day, seven days a week — and have those meals delivered to our seniors, all throughout the state of California,” Newsom said Friday.

The program, which the governor said is the first of its kind in the nation, was hinted at earlier this month when he announced that the Federal Emergency Management Agency had agreed to reimburse costs related to helping provide seniors with food. Newsom said the program could help as many as 1.2 million older Californians who live alone. And he said the effort will also ensure that those seniors have someone they can turn to on a regular basis for any other needs that might arise.

“It’s not just about the meals,” he said during his midday news briefing. “It’s about a human connection, about someone just checking in as they’re delivering those meals and making sure people are OK.”


The future of brick and mortar retail?

@emilygee: The bodega down the street has photographed all their shelves and posted an enormous collage outside so you can browse without going in

Pictures outside of store items inside

Catch up on past Weekly Research Briefings >