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Integrated Insights -- Week of October 5, 2020

Integrated Insights -- Week of October 5, 2020

October 06, 2020

Over the last week, COVID-19 struck the US government in a meaningful way, as several key advisors in the White House & the President tested positive. Initial reactions on Wall Street were muted when news that President Trump had fallen ill hit the news wires. After a brief stay in the hospital, the President returned home and almost immediately called off future stimulus package talks until after the election--whether we really need to wait that long is uncertain.

Investment markets will struggle with this news should that timeline actually hold.  Some sectors of the economy are beginning to struggle again without government support (particularly entertainment, travel, & hospitality). For a stimulus deal to be completed prior to the election it would likely need to occur in the next 10-14 days.

Here's what we're reading this week:

Weekly Commentary -- U.S. election through a sectoral lens -- BlackRock

  • The U.S. election may have considerable implications on three key sectors: energy, technology and healthcare.

  • U.S. President Donald Trump has tested positive for COVID-19, adding to near- term election uncertainties. U.S. fiscal package negotiations continued.

  • Markets will focus on services purchasing managers’ index (PMI) data from key economies to gauge the pace of the economic recovery.

Health care innovation reaches warp speed -- Capital Group

The U.S. remains a world leader in innovation (for Healthcare) for a number of reasons, but clearly America will not be the only source of pharmaceutical innovation going forward.

“I expect to see many global blockbuster drugs from China by 2030. I anticipate they will begin to produce novel drugs for cancer within five to 10 years and sell them at one-tenth the cost in the U.S.,” -- Cheryl Frank, portfolio manager at Capital Group.

Social Distancing Recovery Dashboard -- Cetera Investment Management

Sources and Notes: Cetera Investment Management, FactSet, Apple (Driving, Public Transit, and Walking Mobility), Transportation Security Agency (Airport Checkpoint Passenger Traffic), OpenTable (Restaurant Reservations), U.S. Employment and Training Administration (Weekly Unemployment Claims), Johnson Redbook Service (Same Store Sales), Mortgage Bankers Association (Weekly Mortgage Application Purchase Index), Federal Reserve Bank of New York (Weekly Economic Index), Bank of America Merrill Lynch (High Yield Bond Spread). The 7-day average is used for metrics that are daily (Driving Mobility, Airport Travelers, and Restaurant Reservations). Data is pushed forward 1- week for the following metrics because there is a 1-week data release lag: Unemployment Claims, Same Store Sales, Mortgage Application Index, and New York Fed Weekly Economic Index. For the 1-week and 4-week change, an up arrow indicates the metric is improving and a down arrow indicates the metric is weakening.