Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

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COVID

7 Ways Covid Has Changed Our World by Aaron Back (WSJ)

A series of articles detailing the 7 ways that COVID has changed the world: exurban growth, shopping habits, vaccine hesitancy, remote learning, the big business potential of vaccines, bigger government spending, and life insurance are the big ideas. [Link; paywall]

The Case Against the Covid-19 Lab Leak Theory by Lindsay Beyerstein (The New Republic)

A detailed takedown of the loose punditry which has surrounded the so-called lab leak hypothesis, which posits COVID originated in a Chinese lab rather than a vector from the natural world as other coronaviruses have. [Link]

Pfizer and Moderna Vaccines Likely to Produce Lasting Immunity, Study Finds by Apoorva Mandavilli (NYT)

While we will only know with the passage of time, initial studies assessing how long mRNA-based COVID vaccines protect recipients are very positive and indicate the shots could generate a lifetime of functional immunity. [Link; soft paywall]

Big Spending

Southwest Offers Workers Double Pay to Avoid July Travel Snags by Alison Sider (WSJ)

The airline is ramping up pay to make sure it has sufficient staff on hand to process the huge swell of customers which are drowning airports and flights with post-COVID demand for travel. [Link]

Tesla is well on its way to smashing last year’s sales record by Tim Levin (Business Insider)

Tesla delivered 201,250 vehicles to customers during Q2, by far its best quarter and putting it on track to easily hurdle its record 2020 sales pace of over 500,000 cars. [Link]

Global App Spending Approached $65 Billion in the First Half of 2021, Up More Than 24% Year-Over-Year by Stephanie Chan (Sensor Tower)

With consumer spending booming, mobile apps are increasingly grabbing share with a huge increase in the number of dollars spent on purchases of apps, in-app purchases, and subscriptions. Apple’s App Store is about twice as large as Google Play. [Link]

China

The deep roots of China’s financial conservatism (Andrew Batson)

High inflation during China’s civil war and the success of the communist government in taming it after defeating the nationalist opposition has deeply colored the fiscal and monetary perspectives of Chinese policymakers. [Link]

Investing

Inner Game with Steven Cohen (Stray Reflections)

A recorded Zoom seminar with Steve Cohen of Point72 Asset Management, focused on his process and the inner approach which has led to his success. [Link]

Retirement

What Peter Thiel’s Roth IRA Means for Yours by Laura Saunders (WSJ)

The revelation that billionaire Peter Thiel has managed to generate a Roth IRA balance of about $5bn is a catalyst for tax reform that cuts off the popular tax minimization strategy. [Link; paywall]

Older Americans Stockpiled a Record $35 Trillion. The Time Has Come to Give It Away. by Ben Eisen and Anne Tergesen (WSJ)

Wealth concentrated in the hands of aging Baby Boomers that will transfer to younger generations over coming years numbers in the tens of trillions of dollars, but the real big inheritances won’t kick off until the 2030s. [Link]

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Have a great weekend!

Sentiment has taken a big step up in the past week.  The AAII weekly sentiment survey saw 48.6% of respondents report as bullish this week, up 8.2 percentage points from last week for the highest reading since the week of April 22nd when over half of respondents reported as optimists.  Not only is this week’s reading ten percentage points above the historical average, but the one-week increase was the largest since an 11.1 percentage point jump during the week of April 8th. Similarly, the Investors Intelligence survey of newsletter writers saw bullish sentiment jump from 56.5% last week to an eight-week high of 59.6%.

Considering bearish sentiment was already muted, that big increase in bullish sentiment was only met with a 1.1 percentage point decline in bearish sentiment.  Only 22.2% of respondents reported as bearish this week, the lowest reading since June 10th.

While bearish sentiment did not experience a particularly large decline, it was an inverse move to bullish sentiment which resulted in the bull-bear spread climbing 9.3 points to the highest level since April 22nd. That means sentiment continues to largely favor the bulls.  Prior to the past year, late 2017 and early 2018 was the only other period in recent years that the bull-bear spread was at similar levels to now.

Given the jump in bullish sentiment did not borrow from bearish sentiment, neutral sentiment took a significant hit this week falling 7.4 percentage points.  That was both the biggest one-week decline and marks the lower level in neutral sentiment since April. Click here to view all of Bespoke’s premium membership options and to sign up for a trial.

Initial jobless claims fell to 364K this week from last week’s upwardly revised level of 415K (originally 411K).  That 51k decline was the biggest one-week drop since a 156K decline between the first and second week of April.  Additionally, this week’s print leaves claims 10K below the previous low of the pandemic.

On a non-seasonally adjusted basis, claims were likewise lower falling from 397.4K to 359.1K. It is somewhat unusual for the current week of the year to experience a decline as historically it has seen claims rise three-quarters of the time.  While regular state claims were lower, PUA claims rose for a third week in a row.  Rising to 115.27K, PUA claims are at the highest level since the week of April 23rd.  In spite of the two programs having moved in opposite directions, the drop in regular state claims was larger as total combined claims fell back below 500K and are roughly 40K above the low of 435.8K from three weeks ago.

Continuing claims were once again not as strong as the reading continues to flip back and forth between increases and decreases week to week. This week saw a small 56K uptick which left seasonally adjusted claims at 3.469 million.  While higher and 56K off last week’s low, claims remain at a healthier level than the rest of the pandemic.

On a non-seasonally adjusted basis and including all other programs through the week of June 11th, claims fell from 14.87 million down to 14.68 million.  That marked the seventh week in a row that total claims across all programs fell week over week.  The Extended Benefits program was the biggest contributor to that decline as the program saw 86.82K fewer claims than the previous week. Regular state programs were the next biggest contributor to the overall decline with claims dropping 64.7K.  With the consistent declines in regular state programs, pandemic era programs (PUA and PEUC) now account for 76.3% of all continuing claims. That share is likely to drop in the coming weeks though as there will be an acceleration in states withdrawing from those programs which will begin to be reflected in this data. Click here to view Bespoke’s premium membership options for our best research available.