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📑 Research Notes for 2020-11-06
This week, we look at the market's reaction to the election, the COVID second wave in Europe, current technology valuation vs. 2000, and the K-shaped recovery in real estate.
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Even if you knew the results of the election in advance, you likely would not have guessed the market’s reaction.
“If somebody told you that the morning after election day we would still be tabulating the results, and that what looks likely is a Biden win with the Senate keeping the house, what would you guess stocks would do? Would anybody choose “best day ever after a presidential vote?” I know I wouldn’t. And yet, here we are. “
A new COVID-19 variant is spreading in Europe.
University of Basel Molecular Epidemiologist Emma Hodcroft explains her research behind the discovery of a new coronavirus variant that is spreading across Europe.
Dot-Com Redux: Is this tech “bubble” different?
(CFA Institute Blog)
Recent volatility notwithstanding, many investors look at the NASDAQ today and have a sense of déjà vu. They are starting to describe the index’s performance with terms like those trotted out during the tech bubble of the late 1990s. Valuation levels for these new tech darlings, the analysts tell us, are “frothy,” “excessive,” and every so often, “bubble-like.” So what are we to make up off all this? Is the NASDAQ headed for another crash, a bust of potentially dot-com bubble proportions?
Assessing the impact of COVID-19 across real estate sectors.
(All About Alpha)
In this environment, the US Real Estate Investment Trusts (REITs) have recovered half of their losses. For example, FSTE Nareit All Equity REITs index recorded YTD return of -12.3% at end Sept. 20 from -23.4% at end March 20. However, the shape of an upturn for the real estate sectors is a K-shaped recovery as shown in Figure 1. Some bright spots like Data Centers, Industrial and Self-Storage are on the road to recovery, but sectors like Retail and Hospitality are among the most battered.
Curated by Joseph Lu, CFA®
Joseph has over a decade of experience as an investment professional, primarily in quantitative analysis and portfolio management roles. He is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder. The CFA charter is a globally respected, graduate-level investment credential by the CFA Institute, a global association of more than 90,000 investment professionals working in over 133 countries.
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