The Dividend Cafe

Market futures were pretty much flat all of last evening, and I awoke at 3:15am to a down 250 level. By the open, futures were pointing to down ~700. It opened there, got as down as -850, and closed down 700 points on the day.

COVID case growth and coverage of it is a fine explanation for market volatility today, but again the performance in structured credit today – mortgages, loans, etc. – paints a different picture. Threats of tariffs with Europe probably did not help, and neither did ongoing polls showing Biden’s lead over Trump continuing to grow.

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Well this was one of the crazier 24 hours in quite some time, more so for what happened last night than today. Futures opened up about 100 points last night, and slowly inched higher for the first couple hours into the evening. Around 6:30pm pacific/9:30pm eastern, my devices starting blowing up that futures had collapsed 400 points (so a net swing of over 500 points) after “White House advisor, Pete Navarro, announced that the phase one China trade deal was over.”

Well, it turns out, not for the first time, Navarro was speaking hyperbolically. Within 30 minutes futures came roaring back to even. President Trump took to the airwaves to say that the trade deal is “fully intact.” I decided to watch the replay of Navarro’s Fox interview, and it was rather obvious that it was a long-winded question and the answer was disconnected from that portion of the question. Regardless, by 3:30am this morning futures were up 300 points.

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Futures were pointing down as much as ~300 points Sunday night (netted for fair value), though that number improved as the night went along. By 3:15am this morning they were pointing to a flat market open. The market traded down ~200 points early and closed up over 150 points, in a 400-point range today …

Links mentioned in this episode:

• There is a solution of the problem of always having a reason to sell, and always having a reason to buy: It is – always having a plan …

• The nation’s debt is talked about as much any topic in the political/economic sphere, but rarely talked about with any real practical sense of what the eventual possible outcomes actually look like. Today we provide five crystalized options for what eventually comes of America’s national debt. This is crucially important for people who care about their kids and grandkids, and people who don’t.

• The “financialization” of the American economy is happening right before our eyes, and it is a major consequence of the monetary regime in which we live. It needs to be understood – the good, bad, and ugly.

• Why inflationary efforts are creating more deflation – an economic primer you will love, and your college professors never gave (or got themselves)

• Proof that dividend growth requires active management, and that passively trying to get it will ensure you lose it

• Small-cap investing is very promising coming out of recessions, and if you think dividend growth needs active management, you should see the data in small-cap!

• The economy is picking back up – but wow does it have a lot of work to do. Check out the updated data from air travel, restaurant reservations, retail shopping, and more. And then, check out what really, really matters – business investment. Some investors are focusing on mall traffic in Q2 of 2020. We are focusing on industrial production in Q1 of 2021.

• The Chart of the Week tells you why the market keeps embarrassing not just bears, but those who don’t understand how markets work

• And in Politics & Money, look at worst news imaginable for President Trump, and the best news imaginable … all at once.

It’s an action packed Dividend Cafe, so jump on in … There is no U.S. Open to watch, so you really have no excuse.

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Futures overnight dipped 400 points by my bed time, were basically back to even at 3:15am, and then dipped a tad before the 5:30am release on jobless claims. That number came in at 1.5 million, and the market didn’t respond. We opened down and reached down -270 before reversing. It was a bouncy day but never was the range of movement very wide.

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