Equities sold off further on technology share valuation concerns following a five-month rally, led by tech megacap names, including Alphabet, Amazon, Microsoft, Facebook, and Tesla. Stocks rebounded Wed on dip buying, although the market broadly resumed selling off Thurs-Fri on other bad news, including a diminished probability of a 5th round of fiscal stimulus after the Senate failed to garner 60 votes to advance Sen. McConnell’s “skinny” relief bill. Investors are also concerned about stubbornly high US unemployment; weekly unemployment claims were slightly higher than expected at 884k initial claims and 13.385 mil. continuing claims.
Recap: Tax-exempts remained well-bid during the holiday-shortened week posting small gains, but underperforming Treasuries. The market remains supported by a continued, albeit smaller supply-demand imbalance with continued strong retail fund inflows and fairly valued M/T ratios. As mentioned earlier, the odds of a 5th round of Federal stimulus is greatly diminished as the Senate failed to vote through Sen. McConnel’s “skinny” package and as the election nears. Despite this, investors remain encouraged that state and local governments will be able to work through the pandemic inflicted recession and as such continue to consider Munis as a safe haven.Full Weekly Report
Please find attached Ramirez & Co.’s Quarterly Macroeconomic Outlook. In our report, we continue to monitor the US economy, global events and the Fed’s outlook on the economy and rates:
Members of our Financial Strategies Group, Niso Abuaf, Konstantin Semyonov and Duncan Sinclair, would be happy to discuss further any of the material with you.Full Quarterly Report