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A lot of red today

edited October 13 in Other Investing
Not huge losses, but mostly gently down.

Exceptions - Bond funds DODLX and PBDIX saw small gains, as did Price’s rather new multi-strategy (hedge like) TMSRX. What I’ve been pondering is - If the tech and growth sectors correct sharply, will the lagging deep value stocks do so as well ... or will they perk-up?

(@Crash will be glad to know the M* Tracker is working again. I suspect it was under maintenance.)

Comments

  • edited October 14
    Thanks, @hank. It's "up" again..... Yes, a small loss today. It was -0.3% today, since I'm lean on stocks. PTIAX and PRSNX were up. Strange, BIAWX, very growth-y, was up a tiny bit.
  • Two antibody drugs for COVID-19 from J&J and Lilly have manufacturing issues. This impacted health care sector and the broader index yesterday.
  • bump this one further up, for 19 October, Monday.
    Lots of red today, too. Glad to be overweight bonds. Didn't do too badly.
  • msf
    edited October 19
    The issue in the trials was safety of the vaccine generally. One of the purposes of phase 3 clinical trials is to test the safety of pharmaceuticals in a broad population sample. Each trial was paused to allow the companies to determine whether an illness was due to effects of the vaccine.

    https://www.statnews.com/2020/10/13/covid-19-clinical-trials-pauses-at-jj-and-eli-lilly-could-be-bumps-on-a-hard-road-or-mere-blips/

    Since these pauses occurred almost a week ago, I doubt that they were a reason for today's declines, especially since the markets opened on the upside and didn't go negative until 10:30 or so.

    Mass manufacturing and distribution has its own set of issues. Followup data from post- trial inoculations will be needed to show that manufacturing was safe and that over time a vaccine remains effective. See, e.g. the Cutter Incident.
    https://www.cdc.gov/vaccinesafety/concerns/concerns-history.html

    Monday's market:
    https://www.usatoday.com/story/money/markets/2020/10/19/dow-stocks-fall-hopes-new-covid-19-stimulus-fade/5984119002/
  • edited October 19
    “Stimulus Roulette” is how one pundit labeled the market action today. ... :)

    In an indirect way, Covid is implicated in today’s hit, since the stimulus bill being debated in Washington is supposed to provide Covid relief to the economically afflicted (but also stands to boot the whole economy). Markets seem to be reacting to whichever way the wind blows as those talks continue.

    Hard to make out much looking at my funds or watch list. Gold price was quite steady, but some of the miners took a hit. OPGSX lost 2.32% - my worst performer. On my watch list, a bit of coincidence as Price’s Blue Chip (TRBCX) matched the exact percentage loss of the S&P. Both down 1.63%. You don’t suppose ...?

    Bonds were steady, as Crash observed. Surprisingly, both high yield funds I watch were unchanged. Real estate fell - often a sign of rising rates.

    Here’s a CNBC story on the latest stimulus talks.
  • Maybe this from The Financial Times via Axios?

    The Fed is starting to question its own policies
    Several officials at the Fed are beginning to worry about asset bubbles and excessive risk-taking as a result of their extraordinary policy interventions, James Politi writes for the Financial Times, citing interviews with multiple Fed presidents and members of the Board of Governors.

    Details: Some are now pushing for "tougher financial regulation" as concerns grow that monetary policy is "encouraging behavior detrimental to economic recovery and creating pressure for additional bailouts."

    What they're saying: “I don’t know what the best policy solution is, but I know we can’t just keep doing what we’ve been doing,” Minneapolis Fed president Neel Kashkari told the FT.

    “As soon as there’s a risk that hits, everybody flees and the Federal Reserve has to step in and bail out that market, and that’s crazy. And we need to take a hard look at that.”

    Boston Fed president Eric Rosengren called for a “rethink” of “financial stability” issues in the U.S., and Fed governor Lael Brainard said in a speech last month that expectations of extended low-interest rates were boosting “imbalances” in the U.S. financial system, Politi reported.

    Why it matters: Economists, strategists and fund managers on Wall Street have said for months that the Fed has effectively killed price discovery by "nationalizing" the bond market with its actions and is artificially holding up the price of financial assets.

    That has elevated U.S. economic inequality, and while market participants have cheered, the Fed's popularity has sunk among most Americans.
    Much of the U.S. economy, including jobs and spending at small businesses and firms not dedicated to e-commerce, continues to be weak.

    The big picture: The latest comments from Brainard, Rosengren, Kashkari and others suggest that influential members of the Fed's policy-setting committee may be pushing back against the so-called Fed put — a belief among investors that if stock prices fall enough, the Fed will bail them out by lowering interest rates or by pushing trillions of dollars in liquidity into financial markets through quantitative easing.
  • yup. no argument here.
  • I am keeping my cash level higher than usual as Nov 3rd rolls around. Hope I am wrong.
  • Wow, interesting catch, @Old_Joe.
  • edited October 20
    One could speculate on the timing of this sudden Fed "insight". The Fed has been as meek, servile and cooperative as possible in the face of the threats and vituperation spewing from the Executive branch, and the lack of fiscal cooperation from the Senate. Perhaps they are sensing a change in the wind?
  • @Old_Joe, There is also the ineffectiveness of Fed Policy (Cares Act):
    federal-reserve-treasury-coronavirus
  • Hard to blame the Fed for an act that was mandated by Congress.
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