◘ Factoid of the day: Only 80 CEOs in the S&P 500 reduced personal holdings in the businesses they led during 2019, according to a Wall Street Journal analysis—and the majority of them did so during a company buyback. ◘ Does it mattter who’s President? The median S&P 500 gain in Democratic terms since 1928 has been 27.7%, according to Leuthold Group LLC, compared with 30.2% under Republicans. Via Bloomberg, here is a list of administrations that saw three-year advances in the S&P 500 close to or greater than this one:
• Bill Clinton’s second term. (99%)
• Franklin Roosevelt’s first term. (98%)
• Dwight Eisenhower’s first term. (82%)
• Clinton’s first term. (51%)
• George H.W. Bush’s term. (49%)
• Reagan’s second term. (47%)
So….it’s really about 1. demographics->lower inflation->lower interest rates 2. buybacks 3. section 162(m) of the revenue code 4. introduction of 401ks and IRAs 5. decimilization 6. commission-free trading 7. stock picking’s demise and the rise of passive investing/indexation/ETFs.
◘ The bid to Bitcoin and gold: Notional two-year note yields…Switzerland: -0.80% Germany: -0.65% Denmark: -0.65% Slovenia: -0.64% Netherlands: -0.63% Belgium: -0.62% France: -0.62% Finland: -0.61% Austria: -0.60% Spain: -0.46% Portugal: -0.40% Sweden: -0.31% Italy: -0.22% Japan: -0.13% Bitcoin and gold: 0.00% ◘ Mr./Ms. market is betting on a Trump win with further tax cuts, continued
low interest rates, and business friendly policies. It is also predicting that the corona virus will not be as devastating as many fear, with the drag in the first quarter recouped over the next two quarters
. ◘ Economist China correspondent has an interesting point about the coronavirus battle “I would, somewhat cynically, add another indicator that suggests the tide has turned: Xi Jinping’s appearance yesterday on the “front lines” of the fight against coronavirus. His first. There may well be more confidence about associating him so openly with virus-control efforts.” Simon Rabinovitch
◘ Sustained downward trend in reported new coronavirus cases in China: both in Hubei (where the trend is bumpy) and in the rest of the country. Chart attached. This is official data, so the usual caveats apply. Deaths could start turning down in a few days. There is no testing shortage outside the main infected areas. Look at Beijing. Just a handful of new cases in a
week. Markets are saying back to normal in a few weeks.
◘ And the winner is….Barunson Entertainment & Arts Corp., the production company that made the movie “Parasite”, surged as much as 29%, nearly by the daily limit, after the black comedy about three Seoul families won four Oscar awards.