Monthly Archives: October 2020

S&P 500 yearly seasonality

Below is an interesting chart showing the seasonality of the S&P 500 from 1985 till 2019. The total return of the S&P 500 is 10% per year on average. As can be seen on the chart on average the S&P 500 goes up till July when it stalls to start rising again in October. This effect is well known, there’s even a famous saying about it: “Sell in May and go away. But remember to come back in September”.

S&P 500 seasonality 1985 - 2019
S&P 500 seasonality 1985 – 2019

Does the start of flu season say anything about the economic impact of coronavirus?

Here’s two interesting charts I found which show that flu season seems to typically start in November and ends in April. This is interesting at this moment because of the ongoing coronavirus pandemic and what it means for people working from home and eventual lockdowns to stop the rise of the virus.

People with flu like systems are supposed quarantine themselves and work from home. So people will generally need to quarantine until they show no symptoms and have a negative corona test which currently can take a few days. Lockdowns are needed to suppress the virus if the virus spreads faster than anticipated and starts clogging up the healthcare system because hospitals get overloaded with ICU patients.

This has all kinds of implications for the economy as we’ve already seen in March of 2020. Working from home stocks like Zoom will profit while airline stocks suffer because people will fly less. At the same time these charts might offer us a view in to when humans are most vulnerable for coronavirus and when the virus spreads more easily around humans. In both charts you can clearly see that flu seasons generally seems to start around week 46.

Here’s a chart showing the last few flu seasons in the United States.

Share of influenza tests returned positive per week in the United States 2015 - 2020
Share of influenza tests returned positive per week in the United States 2015 – 2020

And here is another chart showing the number of people in the Netherlands visiting the doctor who test positive for flu symptoms per 100.000 patients.

Number of people in the Netherlands visiting the doctor who test positive for flu symptoms per 100.000 patients 2015 - 2020
Number of people in the Netherlands visiting the doctor who test positive for flu symptoms per 100.000 patients 2015 – 2020

European equities are at a 100 year low relative to US stocks

This chart by Morgan Stanly has been going around on Twitter showing how badly European stocks have underperformed US stocks.

This underperformance has been going on for 100 years now although there have been short times in between when European stocks outperformed US stocks. For example in the eighties or late nineties. But since 2000 it has been one slow grind lower. This is particularly interesting because US stocks are viewed as richly valued because they have a much higher price/earnings ratio than their European counterparts.

European equities are at a 100 year low relative to US stocks
European equities are at a 100 year low relative to US stocks

According to MSCI the total return for the MSCI EMU Index (an index of equities from the 10 countries that have implemented the Euro) is just 3.73% per year. The MSCI Europe Index has done better with an average total return of 7.85% since 1987. While the MSCI USA Index has returned 10.84% per year since 1987.

MSCI EMU Index 2005 - 2020
MSCI EMU Index 2005 – 2020

Amsterdam hotel occupancy dropped to 38% at the end of August 2020

The Amsterdam tourist board maintains a website with statistics about tourism in Amsterdam. Among other things they document the hotels that are open and the occupancy at these hotels.

It is no surprise that the corona crisis has had a big impact on the tourism sector. Hotel occupancy in Amsterdam was down to 38% at the end of August 2020. At the same time only 233 hotels were open. At the start of the year around 300 hotels were open. That’s a significant drop. The closed hotels are not being factored in the 38% occupancy rate. That rate is only calculated based on hotels that are open.

The below chart shows the occupancy rate (red) and the amount of hotels that are open (green) and compares those numbers from 2020 to 2019. It’s quite easy to point to when the lockdown started.

Amsterdam hotel occupancy chart 2020 compared to 2019
Amsterdam hotel occupancy 2020 compared to 2019

What this means for the Amsterdam economy and maybe the housing market in Amsterdam remains to be seen.