The Dividend Cafe

COVID Health Information • The seven-day average of new tests is now 820,000, a new high (by far). Nationwide, the increase in cases over the summer is practically in line with testing increases. It is the select states where positive cases outpaced increases in testing. • Add Johnson & Johnson’s Ad26.Cov2-S to the list of vaccine candidates showing very positive results. Their trials thus far were limited to monkeys, though a clinical trial has now begun in Europe and the United States. The full study has been peer-reviewed, and is available upon request. The source of excitement here is that the strong antibody response is coming from a single dose … They are targeting phase 3 trials for September • A source of mine had been sending me daily updates throughout the last few months on one of New Jersey’s premier hospitals and their COVID exposures, particularly when they were seeing hundreds of patients per day, suffered extraordinary losses, and were having to re-purpose facilities to meet demand. At some point it waned, then they shut down the COVID wing, then the COVID patient load of standard inpatients and ICU steadily declined. Well, today, I got an update. For the first time, this hospital does not have a single COVID patient. Praise the Lord. • Not a lot of change in the general messages of the chart quadrant today. Cases are declining; hospitalizations are declining in the troubled places and flattening elsewhere; a few smaller states are seeing some mild growth in cases off of very low levels. The questions in front of us deal with society’s ability to “live” with this virus, and to continue mitigation against severity and mortality. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

COVID Health Information In the “F.A.C.T.” section below, you will see what I believe is the most important data point this summer around the Arizona/New York case data … Yesterday’s new cases vs. the Tuesday of last week declined 4.5%, making it the third day in a row of week-to-week decline, something that Pantheon pointed out to me this morning has not happened since late May. The 7-day moving average of new cases is down 4% since its peak. The California and Texas hospitalization reporting is totally screwed up, and so national trends are distorted when two of the largest states can’t get their reporting straight. Where states had a hospitalization issue and are not struggling with reporting, the trend is very clear that hospitalizations are declining, ICU’s are declining (though not as much as hospital admissions), discharges are increasing, and stay time in hospitals has been cut in half from what it was in April. I want to provide all data, good and bad, so I have been including each day the facts around case growth in some states like Oklahoma, Alaska, Rhode Island, etc. And while the empirical fact of case growth, not case decline, has been pointed out there, I think it adds to the honesty of the presentation to mention that the “case growth” there has come off of very, very low bases. A fascinating look at Sweden’s situation with some quotes from the “Anthony Fauci of Sweden” (Anders Tegnell) throughout. I read a fascinating study this morning from the Mayo Clinic concluding that there have been substantially lower COVID infection rates for those who have received vaccines in the last five years for non-COVID related diseases such as polio, Hepatitis, geriatric flu, and others … Happy to send to those interested (a heavy read). Sometimes the thing to do when forecasts are off is not be critical, but be grateful. And also, to learn for the future … DividendCafe.com TheBahnsenGroup.com

COVID Health Information • Cases were down 8.3% from the same day last week, and these two consecutive days of week-over-week decline represent the first two days of such in about eight weeks. • Testing is up, case growth is dropping, so positivity rate is dropping. All data points have more room to go, though. • The vaccine candidate from Pfizer/BioNTech have begun stage three trials and are targeting a regulatory review by October. Moderna is also in a large, final-stage trial for their candidate. • Dr. Francis Collins, the Director of the National Institutes of Health (Dr. Fauci’s boss), has provided some stunningly useful insights in understanding the greater resistance to COVID embedded in the society than we previously thought. T cell resistance based on past exposure to other coronaviruses (sometimes the cause of colds we have all had) is explaining a larger immunity and resistance than previously understood. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

This is the replay of the Market Outlook National Video Call with David L. Bahnsen and Scott Gamm from July 27, 2020. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Today's Dividend Cafe reminds of the uncertainty that exists around the world today. Europe may seem to have rectified some parts of their uncertainty, but they invited new uncertainties in doing so. The U.S./China tensions are not solving themselves, and you may have read somewhere that COVID case growth hasn't solved itself yet either (highly contagious viruses are interesting, that way). It is a both unavoidable and unsettling reality of life right now - many conditions, globally and not just domestically, are uncertain. In answer to this uncertainty, the Dividend Cafe provides a little refresher of some of the most basic investment principles we believe in, applied to the methodology The Bahnsen Group has built its business around - dividend growth. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Data this week has been quite a mixed bag with some of the encouraging data being more encouraging than I expected, and some of the negative data being more negative than expected. “Sustained outright declines in new cases are not that far off” [Ian Shepherdson, Pantheon Macroeconomics], but right now we are just watching the new case curve peak, and disparate results in different states makes it all tough to analyze. The chart and information I provide at the top of our FACT section below is, I think, the most important part of today’s missive. Fundamentally, these three realities have all held up incredibly true: (1) Case growth has been mostly amongst the young and healthier, and (2) Treatments have substantially improved since March/April. I was fascinated to see that Sweden had 132 new cases countrywide yesterday, while Australia had 468. It is just an interesting contrast between a vigorous lock-down and shut-out of visitors (Australia), versus the encouragement of a herd immunity build-up. Sweden’s new cases and mortalities are now so low that all eyes are really on whether or not they get a sort of “second wave.” The chairman of the Scientific Advisory Committee of the National Institute of Epidemiology in India stated yesterday that Dehli, India is fast approaching herd immunity, another massive world city showing huge positivity in seroprevalence tests and therefore a large part of the population already infected. Major League Baseball season officially kicks off tonight, and while fans are not allowed for now even with masks and distancing (no comment), it is symbolically and substantively delightful that the Yankees will be teeing off on the Washington Nationals tonight. I expect big ratings. Really big. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The market was up 165 points today, mostly on a flat/choppy day that simply escalated in the last two hours of trading. The general mood was that reports the Republicans are open to extending the federal unemployment benefit at a $400/month level through December drove the last day market move higher, but I am skeptical. It is certainly possible, but it strikes me as utterly incomprehensible that the market would not have known Republicans were going to do something like this. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The market closed up +150 points today, though the Nasdaq sold off. Energy led the way today, while Health Care & Technology were the losers. As for health data: Case growth Monday was 4.2% lower than Monday of last week. The national percentage of positive tests was down to 7.9%, the lowest in nearly two weeks. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The market was flat today in the Dow, but both the Nasdaq and the S&P were up (the Nasdaq meaningfully so after last week’s travails). Today’s missive really, truly does go all around the horn – lots and lots of up to date health info, and some useful info with the stimulus bill, housing, the Fed, and more. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

In this week's Dividend Cafe we focus on the trade-off of volatility and expected returns A market summary of the week that just was Where the next stimulus bill may be heading Why QE is not acting like debt monetization (yet) ... and so much more Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com