Cumberland Advisors Week in Review (Dec 21, 2020 - Dec 25, 2020)

Cumberland Advisors

Sun Dec 27, 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 for fixed income. 10 & 30yr bonds are exactly where we left them last Friday. 95bps on the 10yr & 170bps on the 30yr.<br /> -Munis? No change since Friday. No deals.<br /> -Muni market was hoping for direct aid to state and local gov'ts from the stimulus. They hopefully will benefit from the stimulus working its way through the economy.<br /> -We expect to see increased spending from the next congress, even if the Republicans hold the Senate<br /> -We expect more initial spending to occur during Biden's honeymoon phase<br /> -Therefore there could be a deal for direct aid to state and local gov'ts<br /> -Spending should increase with vaccines<br /> -Perception of inflation could affect bond yields<br /> -We thank all of you for joining us week after week during these trying times<br /> -Have a great holiday and a happy new year</p> <p><strong>Matt McAleer & Equities / ETFs</strong><br /> -It was nice to see volume and volatility take a little break this week: I explain.<br /> -If you've traded the markets this year in a reasonable way, primarily equities but bonds also, you "really earned your spurs this year!"<br /> -At Cumberland Advisors, we like to measure volatility in plus or minus two percent days in the S&P 500<br /> -Average years see sixteen "volatile" days by our measure. This year? Forty+ and it's not over.<br /> -When we're trying to allocate capital, positive returns take care of themselves, or to put it another way, the upside tends to take care of itself if the downside is handled appropriately.<br /> Heading into Q1 we need to be cognizant of some of the speculative activity we're currently seeing in the "call" market on the CBOE<br /> -What's speculative? Buyers & Sellers of contracts under twenty.<br /> -Two weeks ago, over 29% of the options traded were of that nature (they were calls).<br /> -That tends to be a signal that the upside from there may be limited. Maybe the market needs a reset?<br /> -Don't define what you're expecting from the equity market: Watch, Analyze, & React!<br /> -Have a great Christmas, Happy Holidays, let's get 2021 off to a great start.<br /> -Contact John or I with any questions you may have, thank you!</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/yypqjcobP04" target="_blank" rel="noopener">https://youtu.be/yypqjcobP04</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-international-equities-at-year-end-2020-the-promise-ahead/" rel="bookmark">International Equities at Year-end 2020 & the Promise Ahead</a></h2> <h6><strong>Author:</strong> Bill Witherell, Ph.D., <strong>Post Date:</strong> December 23, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-international-equities-at-year-end-2020-the-promise-ahead/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-International-Equities-at-Year-end-2020-and-the-Promise-Ahead-by-William-Witherell-Ph.D-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-International-Equities-at-Year-end-2020-and-the-Promise-Ahead-by-William-Witherell-Ph.D-672x372.jpg 672w, /sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-International-Equities-at-Year-end-2020-and-the-Promise-Ahead-by-William-Witherell-Ph.D-1038x576.jpg 1038w" alt="Market Commentary - Cumberland Advisors - International Equities at Year-end 2020 and the Promise Ahead by William Witherell, Ph.D." width="672" height="372" /> </a></p> <p>During March and April of this year, the global economy and equity markets were hit with a severe shock from the COVID-19 pandemic and the widespread lockdown measures governments imposed in response. In May and June, the spread of infection lessened in many economies, lockdowns were largely ended, and restrictions eased. Equity markets started a […]</p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/cumberland-advisors-market-commentary-cio-overview-2021-market-macro-outlook/" rel="bookmark">CIO Overview – 2021 Market & Macro Outlook</a></h2> <h6><strong>Author:</strong> David R. Kotok, <strong>Post Date:</strong> December 21, 2020</h6> </header> <div class="entry-summary"> <p><a class="post-thumbnail" href="https://www.cumber.com/cumberland-advisors-market-commentary-cio-overview-2021-market-macro-outlook/"> <img class="attachment-post-thumbnail size-post-thumbnail wp-post-image aligncenter" src="/sites/default/files/uploads/2020/12/CA-Market-Commentary-CIO-Overview-—-2021-Market-Macro-Outlook-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/CA-Market-Commentary-CIO-Overview-—-2021-Market-Macro-Outlook-672x372.jpg 672w, /sites/default/files/uploads/2020/12/CA-Market-Commentary-CIO-Overview-—-2021-Market-Macro-Outlook-1038x576.jpg 1038w" alt="" width="672" height="372" /> </a></p> <p>“Now what?” we are asked after a 2020 that saw a full-year market whipsaw round trip, coupled with a COVID-induced economic deep dive in the spring. The V-shaped recovery that followed is starting to falter. Let’s take a look in this 2021 market & macro outlook. Jim Bianco has given us permission to use a […]</p> </div> <hr /> <header class="entry-header"> <h2 class="inner_text_heading"><a href="https://www.cumber.com/florida-covid-update/" rel="bookmark">Florida-COVID Update</a></h2> <h6><strong>Author:</strong> David R. Kotok, <strong>Post Date:</strong> December 20, 2020</h6> </header> <div class="entry-summary"><a class="post-thumbnail" href="https://www.cumber.com/florida-covid-update/"> <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-Florida-COVID-Update-672x372.jpg" sizes="(max-width: 672px) 100vw, 672px" srcset="/sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-David-Sunday-Florida-COVID-Update-672x372.jpg 672w, /sites/default/files/uploads/2020/12/Market-Commentary-Cumberland-Advisors-David-Sunday-Florida-COVID-Update-1038x576.jpg 1038w" alt="Market-Commentary-Cumberland-Advisors-David-Sunday-Florida-COVID-Update" width="672" height="372" /> </a></div> <div></div> <div class="entry-summary">As much as you may know about airborne transmission of COVID-19, something new may be learned from this video. How risky is it, for instance, to stand in line behind someone who is wearing a loosely fitted mask? Find out. See “Military-grade camera shows risks of airborne coronavirus spread,” https://www.washingtonpost.com/investigations/2020/12/11/coronavirus-airborne-video-infrared-spread/ We thank all the readers […]</div> <div></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> <header class="entry-header"></header> <hr /> <p style="text-align: center;"><strong>A Special Holiday Message from</strong></p> <p style="text-align: center;"><strong>John Mousseau, President & CEO Cumberland Advisors</strong></p> <p><center><br /> <iframe src='https://www.youtube.com/embed/_ODi2Plo4Hg' 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 21, 2020 - Dec 25, 2020)

CUMBERLAND ADVISORS' WEEKLY RECAP

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