The Dividend Cafe

In this week’s Dividend Cafe we will address all of this and more:

• Market week in review – is this the tech correction we have been anticipating???

A perfect way to launch your Labor Day weekend … Let’s jump in, to the Dividend Cafe!

Links mentioned in this episode:

COVID Health Information

• Confirmed cases in the U.S. are running about flat this week to last week, which leads some to say, “oh good, cases are not further increasing,” and it leads others to say, “see, the rate of decline has flat-lined.” It would seem to me that neither posture is the most astute given all we have learned, particularly in the context of applying COVID to our economic and market and societal realities. But as long as the focus is wrongly put on cases versus the other metrics we have learned are more systemically significant, that debate will likely continue.

• If one were inclined to earnestly follow the case growth numbers, though, and I certainly provide them here (despite my insistence that they are of little use I still play along), it would be noteworthy that while case growth has flattened, testing is actually up 6%, with the positivity rate is down to the 5-handle we were waiting for. In other words, adjusted for testing, cases are continuing to decline.

• If there is one “prediction” I can offer here (and if there is anything NO ONE should be doing around COVID based on the last four or five months, it is making predictions), it is that we will see cases on college campuses in the coming weeks – cases that will create little or no hospitalizations – result in the next round of headlines and hand-wringing (and everyone can decide for themselves if such will be justified or not). P.S. – 546 positives art University of Kansas – zero hospitalizations; Ohio State University 882 positives, zero hospitalizations.

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The extraordinary drop in new cases has slowed down, as expected. New cases seem to have flat-lined even as hospitalizations and mortalities continue declining, pointing to the increasingly less symptomatic and lethal nature of COVID cases currently being tested.

Color me confused by analysts and experts who are confused by the low mortality metrics coming out of European countries in their late summer increase of new cases. I would think everyone would have expected the low mortality rates Europe is seeing based on the experience of the U.S. this summer (better treatment, healthier infections, less severe virus, etc.).

The CFA Institute published a provocative article last week from Laurence Siegel (Director of Research at the CFA Institute Research Foundation) and Stephen Sexauer (CIO at the San Diego Employees Retirement Pension) looking at the dangers of COVID that are not specific to COVID (Bastiat’s law of the unseen versus the seen). This chart in particular grabbed me.

Links mentioned in this episode:

In this week’s Dividend Cafe we will:

• Review the week that was in markets

• Really spend the time we need looking at what the Fed has done, will do, and will never, ever do

• Provide five key investment implications to the monetary regime we now live in

• Do a “Euro”pean history lesson for you, and look at what that means for investors now

• Provide an explanation of how business investment works, what the hold-up has been, and why it matters

• Politics and Money – a look at this week’s Republican convention

• Chart of the Week

Let’s jump in, to the Dividend Cafe!

Links mentioned in this episode:

The market rose 160 points today, perhaps from a mix of reasons (Fed talk, hurricane control, and COVID testing news – see below). The S&P was up just a tad, and the Nasdaq was actually down on the day.

I do feel like today’s missive is a meaty one, so I hope you will enjoy reading it as much as I enjoyed writing it. I confess, this “every other day” missive schedule has been much more manageable for yours truly! Okay, let’s go around the horn …

COVID Health Information

• The only states not seeing rapid decline in hospitalizations are Alaska, Hawaii, Montana, and West Virginia – more or less the overall national trend and data reality where there is a real COVID presence is in overwhelmingly declining COVID hospitalizations.

• And even apart from the dropping hospitalizations, and dropping cases, the hospitalizations-per-confirmed cases has dropped substantially from the spring levels, unambiguously supporting the notion that the recent infections affected a less vulnerable and more healthy group, and lending support to the idea many epidemiologists have proposed that the virus is losing potency.

Links mentioned in this episode: