First Word

COVID-19 UPDATE: Bonds of many "epicenter" stocks are back to par. Wow. FYI, Bars not reason millennials spreading COVID-19.

Click HERE to access the FSInsight COVID-19 Daily Chartbook.

STRATEGY: Very telling that "epicenter" stocks rise during choppy market week
It has been a really choppy week for markets, and stocks still remain ~7% off their recent highs. And we soon enter the seasonal trade "sell Rosh Hashanah, buy Yom Kippur" (9/19-9/28) so this bumpy ride might continue.  Stocks have risen relentlessly since March, so any pullback is not entirely surprising to us.  And for the past few days, we have highlighted multiple reasons why stocks still have positive risk/reward into YE.

If I had to cite a few curiosities this week, two stand out:

- foremost, epicenter stocks have outperformed.  This is interesting because it is telling that "epicenter" stocks are showing strength during a broader sell-off.  Certainly, in my opinion, a change in market character
- second, the VIX has really backed off its highs.  It was 40 a week ago and even yesterday, closed at the lows

In all, I would interpret this as selling seems closer to an end than a beginning.

The video in this report is only accessible to members
Epicenter stocks, who survive this economic depression, are stronger biz = higher margin = higher P/E multipleThis global pandemic gauntlet is a true test for any company, but the cyclicals (aka "epicenter") are particu...

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