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BCA Weekly Commentary 2/7/20


SUMMARY. Last week highlighted the focus should be put on monetary policy vs the virus outbreak. As it turns out the highlight of the week was NOT the disruptions to growth the virus posed, but the MONETARY BAZOOKA via the Chinese central bank. It embarked (just like the US FED) on an unprecedented liquidity injection or in simpler terms printing money. Just like our FED did starting in September, the Chinese followed suite by injecting hundreds of billions into their banking system to offset weakness posed by the virus. Economically for the week both manufacturing and non-manufacturing showed incremental strength while housing slight margin weakness.


INVESTMENT IMPACT. Conservatism still reigns across our model portfolios via elevated cash levels which we may carry for most of the coming year given our expectations of slowing growth later in year into 2021 as elections pass, the effects of trade lessen and monetary interventions wane. We should note volatility in our Electric Vehicle (EV) holdings increased as positions saw significant increases which we promptly trimmed. However, we still maintain driven by exponential increase in EV car models forth coming next 24 months that the tipping point in demand is still ahead of us.


For more insights see our website and disclosures found there at BCA. As always contact us for further explanation of how these events can effect your finances.