Topley’s Top Ten – March 3, 2020

Author

Matt Topley
March 03, 2020

1.The Market Went from Zero Percent Chance of a Rate Cut to 100% Probability

CME GROUP

2.Short-Term Treasury Bond ETF…Anyone Looking at This Chart Would Think Rate Cuts Already Happening.

SHY 1-3 Year Treasury Bond

3.Stocks that Fell the Most Bounced the Least Yesterday…Abnormal Rally

Not a Normal Bounce Back DayThelarge-cap Russell 1,000 was up 4.35% on the day, but notably, the average stockin the index was up much less than that at just +3.25%.  The reason forthe big performance divergence is because the largest ten stocks in theindex were up an average of 5.29% on the day.  A cap-weighted indexthat’s as top-heavy as it is now benefits greatly when its largest membersoutperform, and that’s what happened today.  The two trillion-dollarcompanies in the index — Apple (AAPL) and Microsoft (MSFT) — were up 9.31% and 6.65%,respectively.Normally on big bounce-back days, the stocks that got hit the hardest duringthe selloff bounce back the most.  That didn’t happen today.  Belowwe’ve broken the Russell 1,000 into deciles (10 groups of 100 stocks each)based on share price performance during the massive selloff we saw from themarket’s peak on 2/19 through last Friday (2/28).  The stocks that fellthe most during the selloff (decile 10) actually bounced the least today,rising just 1.92% on average.

4.March and April Typically Strongest Months for S&P

LPL Research

5.Factor Performance During Coronavirus…Momentum Holds Up Well.

The quality factor (companies with soundbalance sheets) has tended to do well during late-cycle periods – such as wherewe stand now. Living up to this expectation, quality posted outsized returns inthe fourth quarter in risk-adjusted terms, outpacing other style factors. Thatoutperformance has faded since the coronavirus outbreak – alongside improvingperformance of momentum (stocks with rising prices) and further weakness invalue (cheap stocks relative to fundamentals). See the chart above. For now, westill see room for our factor views to play out over six to 12 months.

MikePyleGlobal Chief Investment Strategist forBlackRock

6.International Air Transport Association Stats.

Wolf Street The IATA (International Air Transport Association) It gave some examples, without naming airlines:

  • “A carrier experiencing a 26% reduction across their entire operation in comparison to last year”

  • “A hub carrier reporting bookings to Italy down 108% as bookings collapse to zero and refunds grow”

  • “Many carriers reporting 50% no-shows across several markets”

  • “Future bookings are softening and carriers are reacting with measures such as crew being given unpaid leave, freezing of pay increases, and plans for aircraft to be grounded.”

Just How Bad Is It Going to Get for USAirlines? by Wolf Richter • Mar 2, 2020 

7.Macau Gaming Collapse 90%

Zerohedge—Just as we saw happen with auto sales  in China,Macau’s gaming revenue collapsed in February as a result of China grinding to ahalt while the entire country remains mostly in lockdown as a result of thecoronavirus spread.

Macaubusinesses closed for 15 days to help control the spread of the virus, but itcost them. Gross gaming revenue for February was just 3.1 billion patacas($386.5 million), a 87.8% fall from 2019. Analysts werepredicting the pain ahead of time, estimating for a median of a 90% drop,according to Bloomberg. 

Macau Gaming Revenue Collapses87.8% In February by Tyler Durden

8.Update on “Buffett Indicator”

Here’sanother way to look at it, using the “Buffett Indicator”:

9.Betting Odds Shift to Biden

10.Emotional Intelligence is Today’s Leading Characteristic for Hiring

In today’s fast-paced, high-stakes workplaces, EQ skills can giveyou the edge. But you cannot have EQ unless you have nourished yourself, saysChevalley Hedge. Have you heard about this EQ thing? It seems to be on everyblog, portal and LinkedIn account. Why? Because EQ is essential for businessleaders to have and to […]

By MicheleChevalley Hedge, Nutritionist | Health Writer | Presenter |ATMS Highly Commended Practitioner at A Healthy View

In today’s fast-paced,high-stakes workplaces, EQ skills can give you the edge. But you cannot have EQunless you have nourished yourself, says Chevalley Hedge.

Have you heard about this EQthing? It seems to be on every blog, portal and LinkedIn account. Why? BecauseEQ is essential for business leaders to have and to demonstrate.

Almost 25 years ago, DanielGoleman’s groundbreaking book, Emotional Intelligence, redefined what it meansto be smart. He popularised the term EQ (Emotional Quotient) to describe theability to recognise and understand our own emotions and those of others.

This book sparked a personaldevelopment industry, based around the revelation that unlike our innate IQ(Intelligence Quotient), the five core EQ skills – self-awareness, self-regulation,motivation, empathy, and social skills – could be learned.

While developing emotionalliteracy made sense for individual personal development, its benefits wereinitially less obvious in the workplace, where traditionally ‘soft skills’ wereconsidered secondary to technical, ‘hard’ or IQ abilities with a clearerconnection to profitability, ROI and achieving KPI’s.

In recent years though,businesses have come to recognise the value of EQ. According to a recentLinkedIn survey, 57% of employers said EQ or ‘soft skills’ are the first thingsthey look for when recruiting.

“Empathy, motivation, awareness ofothers, relationship management and social interaction are all important skillswhich allow us to successfully reach the desired outcomes of most jobs”.

Michele Chevalley Hedge,Nutritionist, International Speaker and Author, A Healthy View

But it is impossible to havethese skills when you are overfed, undernourished or sleeping poorly.Nourishment has a knock-on effect on everything we value as successfulemployees. When you’re eating well, you tend to sleep better; when you sleepbetter you tend to eat better and have the energy to exercise. When we sleepand exercise well we know this has a positive impact on our stress threshold,critical thinking skills and our ability to connect with our co-workers.

The ultimate people skill

When you look at twocandidates who have similar technical skills and experience, a demonstratedlevel of higher emotional intelligence helps one stand out. As we enter theworld of AI and increased automation, EQ will become even more important as itis a uniquely ‘human’ skill that will not be replaced by technology.

Building an EQ culture

Successful businesses areimplementing corporate wellness programs that have a 360-degree approach. Theyoften include advice from experts on nutrition, mindfulness, meditation, physicalexercise, and emotional intelligence

From large corporations tostartups, focus on taking care of our bodies and brains is no longer some newage movement. It is the number one priority for successful businesses.Nourishment and developing EQ go hand in hand in creating and developingsuccessful workforces.

—Published on March 2, 2020