Cumberland Advisors Week in Review (Dec 14, 2020 - Dec 18, 2020)

Cumberland Advisors

Sun Dec 20, 2020

The Cumberland Advisors Week in Review is a recap of news, commentary, and opinion from our team.

These are not revised assessments, and circumstances may have changed in the market from the time of original publication. We also include older commentaries that our editors have determined may be of interest to our audience. Your feedback is always welcome.

CUMBERLAND ADVISORS' WEEKLY RECAP

As part of Cumberland Advisors' continuous effort to maintain strong customer relationships, we offer this week's short video discussing current market conditions and how we are positioning portfolios.

</p> <p><strong>John Mousseau & Fixed Income / Munis</strong><br /> -Bond Market- quiet week. Yields ground a little higher. Why? Vaccines.<br /> -Munis? Hardly a move.<br /> -John talks about what's happening behind the scenes in the muni world, as well as what expectations are at work in the market<br /> -Next year will look a lot different than this one with vaccines making the difference</p> <p><strong>Matt McAleer & Equities / ETFs</strong><br /> -What a year!<br /> -We've learned some of the same lessons traders have learned over the last 80/90/100 years, and that is to stay reasonable in the face of violent moves in the market<br /> -In this market, it has paid to ask, "what can go right?" or "how much negativity is priced into the market?"<br /> -After the run of spring, summer, and fall, we need to ask the same questions but with the other lens: "what can go wrong?"<br /> -What are we not seeing? Lots of predictions talking about future gains, the loose Fed policy, vaccines. But those things are know and already baked in stocked prices.<br /> -Right now, we'll make no changes to our portfolios<br /> -Asia continues to perform well. Sometimes when I mention China, I get negative feedback. Why?<br /> -As traders, we need to battle any kind of emotional attachment to a market or security<br /> -What I think about China and it's trade policy or economic policy should not affect how I look at them as a trader<br /> -Our philosophy: stay reasonable, and look at trading through a risk/reward prism<br /> -Our last trade was last week when we let go of the banks in US ETF, sitting in about 18% cash<br /> -We'll look for opportunities and pullbacks to get some of that cash to work<br /> -Our next update will be Wednesday, December 23rd. See you then.</p> </div> <div></div> <div><a href="/sites/default/files/uploads/2020/12/Cumberland-Holiday-Greetings-2018-Google-Local.jpg"><img class="aligncenter wp-image-54495" src="/sites/default/files/uploads/2020/12/Cumberland-Holiday-Greetings-2018-Google-Local.jpg" alt="Cumberland Holiday Greetings" width="600" height="388" /></a></div> <div> <div> <div> <div> <div>Please reach out with any questions/comments you may have about this update; we appreciate your calls, comments, and emails. Watch in the player above or at this link: <a href="https://youtu.be/qVdrRV_3Ijo" target="_blank" rel="noopener">https://youtu.be/qVdrRV_3Ijo</a></div> <div></div> </div> </div> </div> <p><strong>-Matt McAleer & Cumberland Advisors</strong></p> <p>Send your feedback from today's email/video to Matt. You can reach him at:<br /> <em>-Link to Matt's Email: <a href="mailto:Matthew.McAleer@Cumber.com?subject=Weekly%20Update" target="_blank" rel="noopener noreferrer">Matthew.McAleer@Cumber.com</a></em><br /> <em>-Link to Matt's Twitter: <a href="https://twitter.com/MattMcAleer4">https://twitter.com/MattMcAleer4</a></em><br /> <em>-Link to Matt's LinkedIn: <a href="https://www.linkedin.com/in/matthew-c-mcaleer/">https://www.linkedin.com/in/matthew-c-mcaleer/</a></em><br /> <em>-Call Matt: <a href="tel:800-257-7013p346" target="_blank" rel="noopener noreferrer">(800) 257-7013</a>Other questions or comments? Email us at <a href="mailto:info@cumber.com?subject=Comment" target="_blank" rel="noopener noreferrer">info@cumber.com</a> or give us a call at (800) 257-7013.</em></p> </div> <p><em>Contact Matt or any one of our advisors by following this link: <a href="https://www.cumber.com/our-people/" target="_blank" rel="noopener noreferrer">https://www.cumber.com/our-people/</a> </em></p> <hr /> <div class="post-thumbnail"><img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2017/03/Market-Commentary-672x245.png" alt="Cumberland Advisors Market Commentary" width="672" height="245" /></div> <div class="static_cont_outer"> <p>Cumberland Advisors Market Commentary offers insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies. Our readers appreciate its timeliness, depth of analysis, and quality of research.</p> <p>Read current and past commentaries here: <a href="https://www.cumber.com/category/market-commentary/" target="_blank" rel="noopener noreferrer">https://www.cumber.com/category/market-commentary/</a></p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-the-december-fomc/" rel="bookmark">The December FOMC</a></h2> <h6><strong>Author:</strong> Robert Eisenbeis, Ph.D., <strong>Post Date:</strong> December 18, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-the-december-fomc/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2018/05/Federal-Reserve-FOMC-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2018/05/Federal-Reserve-FOMC-672x372.jpg 672w, /sites/default/files/uploads/2018/05/Federal-Reserve-FOMC-1038x576.jpg 1038w" alt="Federal Reserve - FOMC" width="672" height="372" /> </a></p> <p>Prior to the Fed’s December FOMC meeting there was a general consensus among economists (see the December NABE forecast, for example) that the Committee would not change its federal funds rate target. But the media was filled with speculation that the FOMC would possibly increase its asset purchase program or begin to purchase longer-maturity Treasuries. […]</p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-fed-data-driven/" rel="bookmark">Fed: Data-driven?</a></h2> <h6><strong>Author:</strong> David R. Kotok, <strong>Post Date:</strong> December 17, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-fed-data-driven/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/CA-David-Kotok-Portrait-With-Title-Blue-2020-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/CA-David-Kotok-Portrait-With-Title-Blue-2020-672x372.jpg 672w, /sites/default/files/uploads/2020/12/CA-David-Kotok-Portrait-With-Title-Blue-2020-1038x576.jpg 1038w" alt="CA-David-Kotok-Portrait-With-Title-Blue-2020" width="672" height="372" /> </a></p> <p>In a Bloomberg column by John Authors, published on December 16 (“Fed’s Last Christmas Before Biden Is All About WAM,”), his chart shows Core PCE has emerged as the most important inflation measure, as it is likely to have a stronger influence on the Fed’s policy decisions than other inflation measures. Continued[…]</p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-drones/" rel="bookmark">Drones</a></h2> <h6><strong>Author:</strong> David R. Kotok, <strong>Post Date:</strong> December 15, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-drones/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-Drones-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-Drones-672x372.jpg 672w, /sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-Drones-1038x576.jpg 1038w" alt="Market Commentary - Cumberland Advisors - Drones" width="672" height="372" /> </a></p> <p>Steve K. got us thinking about drones when he sent an email with three videos, one riveting, one marvelous, and one “downright scary,” all of them about drones. We decided to explore further. We note that we are overweight aerospace and defense in our US ETF portfolios. As you will see, drones are an increasingly […]</p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-the-frog-the-scorpion/" rel="bookmark">The Frog & The Scorpion</a></h2> <h6><strong>Author:</strong> David R. Kotok, <strong>Post Date:</strong> December 13, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-the-frog-the-scorpion/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-David-Sunday-The-Frog-The-Scorpion-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-David-Sunday-The-Frog-The-Scorpion-672x372.jpg 672w, /sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-David-Sunday-The-Frog-The-Scorpion-1038x576.jpg 1038w" alt="Market-Commentary-Cumberland-Advisors-David-Sunday-The-Frog-&-The-Scorpion" width="672" height="372" /> </a></p> <p>We want to paraphrase and update an ancient parable which originated for us along the banks of the Jordan River, as it flows from the Sea of Galilee to the Dead Sea. The Jordan defines the border between modern-day Israel, Jordan, and Palestinian Authority territory. Here’s the modern American version. The river is the Potomac. The territory is the federal center of government called Washington, DC. There are two actors in our one-act, two-scene play. One is a scorpion; the other is a frog. <strong>Scene 1.</strong> […]</p> </div> <hr /> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-siesta-longboat-covid-masks-more/" rel="bookmark">Siesta, Longboat, COVID, Masks & More</a></h2> <h6><strong>Author:</strong> David R. Kotok, <strong>Post Date:</strong> December 11, 2020</h6> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-siesta-longboat-covid-masks-more/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-Siesta-Longboat-COVID-Masks-More-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-Siesta-Longboat-COVID-Masks-More-672x372.jpg 672w, /sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-Siesta-Longboat-COVID-Masks-More-1038x576.jpg 1038w" alt="Market Commentary - Cumberland Advisors - Siesta, Longboat, COVID, Masks & More" width="672" height="372" /> </a></p> <p>Sarasota-based, Cumberland champions mask wearing and other COVID-prevention measures. We also champion business. We believe that Florida’s economics are better served with basic prevention measures in place. We would not lock down everything. We would require basic civic responsibilities, such as mask wearing in a deadly pandemic. The principle is the same as permitting or […]</p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-chris-whalen-on-gses/" rel="bookmark">Chris Whalen on GSEs</a></h2> <h6><strong>Author:</strong> David R. Kotok, <strong>Post Date:</strong> December 8, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-chris-whalen-on-gses/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/Nonbank-Update_-PennyMac-Financial-Services-672x372.png" alt=""C:\Users\Angela Colvin\Pictures\Screenshots\Nonbank Update_ PennyMac Financial Services.png"" width="672" height="372" /> </a></p> <p>Several folks have asked us about the status of the GSEs under the Biden regime. Some may be invested in some of the troubled securities issued by GSEs. Some argue that the US Treasury Secretary can rectify the problem without the help of Congress. We do not agree. We do not expect any help for […]</p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-jobs-as-yearend-approaches/" rel="bookmark">Jobs – As Yearend Approaches</a></h2> <h6><strong>Author:</strong> Robert Eisenbeis, Ph.D., <strong>Post Date:</strong> December 7, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-jobs-as-yearend-approaches/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/Cumberland-Advisors-Market-Commentary-Jobs-–-As-Yearend-Approaches-Eisenbeis-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/Cumberland-Advisors-Market-Commentary-Jobs-–-As-Yearend-Approaches-Eisenbeis-672x372.jpg 672w, /sites/default/files/uploads/2020/12/Cumberland-Advisors-Market-Commentary-Jobs-–-As-Yearend-Approaches-Eisenbeis-1038x576.jpg 1038w" alt="Jobs – As Yearend Approaches (Eisenbeis)" width="672" height="372" /> </a></p> <p>On Friday we got the last look at how the economy is performing, jobs-wise, before the end of the year. On the positive side, the economy did create 245,000 jobs in November, and the unemployment rate edged down to 6.7 percent. We note that critics argue the estimate is too low due to problems within […]</p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/a-twinkle-for-sunday/" rel="bookmark"> A Twinkle for Sunday</a></h2> <h6><strong>Author:</strong> David R. Kotok, <strong>Post Date:</strong> December 6, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/a-twinkle-for-sunday/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-A-Twinkle-for-Sunday-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-A-Twinkle-for-Sunday-672x372.jpg 672w, /sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-A-Twinkle-for-Sunday-1038x576.jpg 1038w" alt="Market Commentary - Cumberland Advisors - A Twinkle for Sunday" width="672" height="372" /> </a></p> <p>“Twinkle, Twinkle, Little Star” existed first as a poem. Written by Jane Taylor and first published in 1806, it was titled simply “The Star.” It was not until 1838 that “Twinkle, Twinkle, Little Star” appeared in print as a song, in a collection called The Singing Master: First Class Tune Book, paired with the tune […]</p> </div> <hr /> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-interest-rates-and-yield-curve-control-part-4/" rel="bookmark">Interest Rates and Yield Curve Control, Part 4</a></h2> <h6><strong>Author:</strong> David R. Kotok, <strong>Post Date:</strong> December 4, 2020</h6> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-interest-rates-and-yield-curve-control-part-4/"><img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-Interest-Rates-and-Yield-Curve-Control-Part-4-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-Interest-Rates-and-Yield-Curve-Control-Part-4-672x372.jpg 672w, /sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-Interest-Rates-and-Yield-Curve-Control-Part-4-1038x576.jpg 1038w" alt="Market Commentary - Cumberland Advisors - Interest Rates and Yield Curve Control, Part 4" width="672" height="372" /></a></p> <p>In Part 4 of our series on interest rates and yield curve control, we will examine two charts and two related tables to help explain yield curve control and implications for the Treasurys market. The first three parts are available here: Part 1, https://www.cumber.com/cumberland-advisors-market-commentary-interest-rates-and-yield-curve-control-part-1/ Part 2, https://www.cumber.com/cumberland-advisors-market-commentary-interest-rates-and-yield-curve-control-part-2/ Part 3, https://www.cumber.com/cumberland-advisors-market-commentary-interest-rates-and-yield-curve-control-part-3/. The first chart and table […]</p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-the-cumberland-state-of-despair-index/" rel="bookmark">The Cumberland State of Despair Index</a></h2> <h6><strong>Author:</strong> John R. Mousseau, CFA & Patricia Healy, CFA & Tom Patterson, <strong>Post Date:</strong> December 3, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-the-cumberland-state-of-despair-index/"><img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-The-Cumberland-State-of-Despair-Index-Mousseau-Healy-Patterson-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-The-Cumberland-State-of-Despair-Index-Mousseau-Healy-Patterson-672x372.jpg 672w, /sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-The-Cumberland-State-of-Despair-Index-Mousseau-Healy-Patterson-1038x576.jpg 1038w" alt="Market Commentary - Cumberland Advisors - The Cumberland State of Despair Index (Mousseau & Healy + Patterson)" width="672" height="372" /></a></p> <p>The Cumberland State of Despair Index tries to capture the despair caused by unemployment brought on by the pandemic and COVID-19 infection rates on a state-by-state basis. This State of Despair Index will be applied as a variable in our credit-scoring model. Continued […]</p> </div> <hr /> <p><b>Raphael Bostic, President of the Federal Reserve Bank of Atlanta, was the keynote speaker at our invitation in 2018 for Financial Literacy Day at the Sarasota-Manatee campus of USF.</b></p> <p><center><br /> <iframe src='https://www.youtube.com/embed/SZJSq7KH5fQ?t=20' allowfullscreen /></center></p> <hr /> <p>Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.</p> <p><strong>Sign up for our <a href="https://www.cumber.com/market-commentary-email-sign-up">FREE Cumberland Market Commentaries</a></strong></p> <p>Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.</p>

Material and commentaries published in the past may or may not be helpful in analyzing current economic or financial market activity. Please note publishing date when reviewing materials. Please email [email protected] for our current thoughts or to reach an advisor.

Cumberland Advisors Week in Review (Dec 14, 2020 - Dec 18, 2020)

CUMBERLAND ADVISORS' WEEKLY RECAP

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