Index P/E ratios are not all they seem

This article points out that forty odd percent of the Russell 2000 makes losses. This is only going to increase. This other article by Miles Johnson explains that the calculation of the P/E for the index is very flawed. The reason is not clear, but it may simply be that people have no idea how to value the index and price it off the naive published P/E.

Bonds

No real sign of inflation yet, but bonds are failing to sustain their rallies, and so writing some call spreads on longer dated treasuries (or futures on them) might be worth investigating. The US government, not unlike all the others, will be having to sell a lot of treasuries in the coming months and years to pay for all the Covid relief measures, so the Bond Bulls are not going to be in the ascendant, even if the economy is weak, IMHO. If the economy is strong, nobody will want to invest in bonds as the returns to equity will be much greater.

Wrap

Navarro let the cat out of the bag—that there will be no trade deal with China, ever. But he had to row back very quickly, as the futures got spooked. Everything recovered, but this is a pretty precarious market.