12 BARRON’S October 12, 2020
REVIEW
28,586.
Dow Industrials:+904.
Dow Global Index:+16.
0.78%
10-year treasury note:+0.
ENDOWMENT TOPS 12%
Stimulating Stimulus
Stocks soared as the week began, with
the Dow industrials up 466 on Presi-
dent Trump’s return to the White
House and hopes for a relief bill and a
peaceful election. That ended when
Trump killed relief talks, but the mar-
ket recovered after he seemed to
change his mind. The week ended
with the Dow rising 3.27%, to
28,586.90; the S&P 500 gaining 3.8%,
to 3477.13; and the Nasdaq Composite
surging 4.6%, to 11579.94.
Covid in the House
After a hospital stay, in which he re-
ceived Regeneron ’s unapproved mono-
clonal antibody cocktail, Gilead Sci-
ence ’s remdesivir, and a steroid,
President Trump returned to a White
House besieged by Covid-19. Contention
raged over the details and timeline of
his case, and the White House failure to
contact-trace. Multiple members of
Trump’s staff, two GOP senators on the
Judiciary Committee, and former New
Jersey Gov. Chris Christie tested posi-
tive. Even the Joint Chiefs of Staff went
into quarantine when the Coast Guard’s
No. 2 tested positive. Trump praised the
Regeneron therapy as a “cure,” called
contracting the disease a “blessing from
God” and said the antibody cocktail
would be given free to those who need
it. Regeneron and Eli Lilly sought ap-
proval for their antibody therapies.
Relief’s Random Walk
On Tuesday, Federal Reserve Chair-
man Jerome Powell spoke about the
urgent need for a stimulus package.
Hours later, Trump tweeted to Trea-
sury Secretary Steven Mnuchin to
cease negotiating until “immediately
after I win.” But that night, he de-
manded passage of parts of the bill,
including airline aid. Talks continue.
A Chilly Forecast
The U.S. Covid death toll passed
212,000, and infections topped 56,
on Thursday. Major businesses began
layoffs, many restaurants faced closing
as the weather turns, and Cineworld
shut movie theaters in the U.S. and
U.K., including 500 Regal Cinemas.
New York state closed schools, nones-
sential businesses, and religious gather-
Brown Dons
An Ivy Crown
It’s the little endowment that could. Brown’s $4.7 billion
fund is the smallest of the eight Ivy League schools. Yet its
12.1% return beat its larger peers, including Harvard,
whose $41.9 billion fund gained 7.3%, and Yale, whose
$31.2 billion rose 6.8%. The University of Pennsylvania’s
$14.9 billion was up 3.4%, Columbia’s $11.3 billion re-
turned 5.5%, and Dartmouth’s $6 billion gained 7.6%.
Princeton and Cornell haven’t reported.
While performance of school endowments mostly
trailed the S&P 500’s 7.5% gain (including reinvested
dividends) in the 12 months through June 30, they’re out-
pacing all U.S. endowments, which posted a median
2.6% return, before fees, according to Wilshire Trust Uni-
verse Comparison Service. College-endowment returns
are net of fees. Endowments took baths when Covid hit
and the market plunged. But those with higher equity
allocations fared better oncestocksbounced back.
Brown’s fund had an unusual mix: 37% was in private
equity, 37% in absolute return (usually hedge funds), and
14% in stocks. The rest was in real assets, fixed income,
and cash. “We’re grateful to an outstanding group of ex-
ternal investment managers, who collectively have exer-
cised measured judgment in the face of historic volatility
in the financial markets,” says Jane Dietze, Brown’s chief
investment officer, in a statement.
Of course, many schools are grappling with financial
pressures, which raise the endowment stakes. Brown said
it expects a fiscal 2021 loss of $100 million to $165 million.
Its endowment provided $171 million, or 14%, of the uni-
versity’s operating budget in fiscal 2020.—Mary Romano
12 %
Growth of the CSI 300 stock
index, made up of China’s 300
biggest companies, compared
to the S&P 500 index’s 7.6%.
$130 B
Assets in tax-exempt single-
state muni bond funds, down
10% in the past six months, and
from nearly $500 billion in 2009.
$67 B
U.S. trade deficit in August,
highest since 2006, and ap-
proaching a record.
4 %
Fall in San Francisco office rents
from March to September 30,
more than double any U.S. city.
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THE NUMBERS
HE SAID
“We can do
more and do better
to break down
systems that have
propagated racism
and widespread
economic
inequality.”
JPMorgan Chase CEO Jamie Dimon on
announcing a $30 billion program to help
Black and Latino home buyers
and small businesses
ings in parts of Brooklyn and Queens.
A Deal for Eaton Vance
Morgan Stanley agreed to pay $7 billion
in cash and shares, a 38% premium, to
acquire Eaton Vance. The deal will al-
most double Morgan Stanley’s assets to
$1.2 trillion. Separately, The Wall Street
Journal reported that Advanced Micro
Devices was talking a $30 billion
merger with Xilinx. And Bristol Myers
Squibb said it would buy heart-drug
developer MyoKardia for $13 billion.
Annals of Regulation
A federal court ordered Cisco Systems to
pay up to $3.3 billion for infringing on
four patents held by Centripetal Net-
works. Cisco will appeal...The House Sub-
committee on Antitrust said four tech
companies— Alphabet , Amazon.com ,
Apple , and Facebook —have “monopoly
power” and called for new laws to break
them up...Regulators fined Citigroup
$400 million over risk deficiencies. Illustration by Elias Stein; Marlene Awaad/Bloomberg