Succinct Summations for the week ending July 24th, 2020 (Plus Safe Haven Investing on WealthTrack)

To close out this hot and steamy weekend I post below the usual weekly summation, the main #1 positive being the all-time low mortgage rates, which might explain the main #2 positive of existing home sales up a whopping 20%.  The main negative as always is the continuing ferocious surge of COVID-19 and jobless claims rising another 1.4 million this week.  The bonus this Sunday night is again the latest segment of the PBS series "WealthTrack," this time on the ever popular topic of safe havens for money (besides the very low yielding and most popular of safe havens -- the T-bill!)  They're forecasting that the hot and steamy weather ends Tuesday.  Let's hope so.  Hope everyone managed to stay comfortable this weekend.  

Succinct Summations for the week ending July 24th, 2020

July 24, 2020 4:00pm by Barry Ritholtz

Succinct Summations for the week ending July 23rd, 2020

Positives:

1. All time record low mortgage rates are encouraging home sales and construction;
2. Existing home sales rose 20.7% m/o/m.
3. New home sales increased to an annual rate of 776k in June.
4. Home mortgage apps rose 2.0% w/o/w.
5. PMI Composite stands at 50.0 for July.

Negatives:

1. Ferocious U.S. coronavirus surge adds 1 million new cases in July, now 3 million+.
2. Jobless claims rose 109k w/o/w from 1.307M to 1.416M.
3. Index of leading economic indicators rose 2.0% m/o/m.
4. FHFA House Price Index fell 0.3% m/o/m, below expectations.
5. Same store sales fell 7.5% w/o/w.

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Sponsored by: July 23, 2020 Dear WEALTHTRACK Subscriber, Safe haven investments are hard to find these days, which is why we need them more than ever. We are faced with risks we haven’t experienced in living memory. A truly global and spreading pandemic, rolling government lockdowns, unprecedented involvement in securities markets by the Federal Reserve and other central banks and massive stimulus from governments with payments to individuals and businesses. Normally when corporate and government debt soars to record levels bond markets get nervous, bond prices fall and interest rates rise as investors worry about getting paid back. Not in today's environment. The Fed has essentially pledged to keep short-term interest rates near zero and backstop numerous types of loans to prevent businesses from going bust and laying off workers. That assurance and the “don’t fight the Fed” adage seem to be enough for most fixed income investors who continue to chase yield, driving bond prices up and interest rates down. Not this week’s guest. Tom Atteberry is Portfolio Manager of the flagship FPA New Income fund which he has managed since 2004. Now one of the largest actively managed short-term income funds with $7.8 billion under management, New Income is the only fund in its category to deliver positive returns for the last 35 years. Tom and his former Co-Manager, legendary bond manager Bob Rodriguez were named Morningstar Fixed Income Managers of the Year in 2008.  FPA New Income carries a Morningstar bronze analyst rating for providing a “…haven from losses and bond-market excesses.”  FPA New Income is also about to become the only short-term bond fund to close to new investors. In this week’s show I asked Atteberry to bring us up to speed on conditions in the bond market, and how they have changed since Covid-19.   Atteberry will also share his One Investment recommendation with us – it might surprise you! If you are unable to join us for the show on television, you can watch it on our website over the weekend.  If you prefer to listen to the podcast, you’ll find WEALTHTRACK on TuneIn, Stitcher and SoundCloud, as well as iTunes and Spotify. Thank you for watching. Have a lovely summer weekend, and make the week ahead a healthy, profitable and a productive one. Best regards, Consuelo