📰 Conscious Capital Insights for 07/24/2020
This week, we take a look at the surge of COVID cases in Hong Kong, the inflation-adjusted yield curve, stock market seasonality, and the stagnant wages of the last 40 years.
We are a California-based registered investment advisor and thought leader, updating you on this week’s top investment news, research, and market performance.
A second wave of coronavirus is hitting Hong Kong. (Bloomberg)
Hong Kong is facing another surge in coronavirus cases, and the city is unprepared for the surge. Doctors are seeing more cases a day than they had in previous outbreaks, and a number of infections with unknown origin have made the outbreak harder to contain. This is a cautionary tale that could see similar recurrences in other countries.
The US real yield curve was negative at quarter-end. (S&P Dow Jones)
Inflation expectations are rising, as evidenced by treasury breakeven rates. The sizeable monetary stimulus likely fueled this, as economic theory tells us that all else equal, increases in the money supply are inflationary as giving people additional money to spend drives up demand for goods, causing prices to rise.
The stock market is about to enter a seasonally challenging period. (Sentiment Trader)
According to Morgan Stanley, stocks are about to enter a time of the year where performance has been challenging, based on data for the S&P 500 over the past 30 years. Seasonality in stocks is a minor factor for investing at best, but it's a consideration as with the extreme level of valuations in U.S. stock market indices.
Over the last 40 years, the tax burden has shifted from corporations to citizens. (Various)
Weekly Price Performance Heatmap (Finviz)
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