Market Commentary, August 24th, 2020
The shortest bear market in history is over.
“The S&P 500 might have hit a record last week, but most stocks have been having bad days. On Friday, for instance, just 220 stocks in the S&P 500 closed higher for the day, and that was far from an anomaly. The S&P 500’s cumulative advance/decline line – a measure of the number of stocks finishing higher versus those finishing lower that technicians use to gauge the market’s underlying strength – has been falling even as the S&P 500 progressed to a record.”
One reason for the U.S. stock market’s rise to date may be dividends, reported Lawrence Strauss of Barron’s. “…equities remain attractive relative to 10-year U.S. Treasuries. The yield on that bond was recently at 0.67 percent, about one percentage point below the S&P 500’s yield.”
IMPROBABLE RESEARCH. The Annals of Improbable Research publishes “…research that makes people LAUGH, then THINK. Real research, about anything and everything, from everywhere – research that’s maybe good or bad, important or trivial, valuable or worthless.” In that spirit, here are a few notable scientific studies that may inspire awe and/or skepticism:
• Coffee improves longevity. There has been a lot of research exploring whether coffee helps people live longer or shortens their life spans. A metastudy published in the European Journal of Epidemiology found people who drank two to four cups of coffee a day were likely to live longer than those who drank no coffee.
• People don’t know what they don’t know – and they don't know it. The Dunning-Kruger Effect is a cognitive bias in which people wrongly overestimate their knowledge or ability in a specific area. “Not only do these people reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the metacognitive ability to realize it.” Notably, when the unskilled are trained and develop skills, they recognize the limits of their abilities.
• Insights about alligators on treadmills. Researchers at the University of Utah found, “…alligators, unlike lizards, are able to walk and breathe at the same time by using a rocking pubic bone – part of the pelvis – to help them inhale and exhale,” reported Science Daily. A study published in the Journal of Comparative Physiology reported alligators that trained on treadmills for 15 months improved their peak oxygen rate by 27 percent.
• Arachnids fly the friendly skies. Venomous pseudoscorpions, which are tiny predatory arachnids, have perfected the art of hitchhiking. They attach to flying insects, such as beetles, when they want to travel to new hunting grounds, reported National Museum Publications.