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The Northern Star Newsletter 6/18/20 - Markets React to Fed Report


Message from Jon

Markets & What We Know Webinar:

SATURDAY June 20th, 2020

10am to 10:30am EST

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Market Update


After last week's big sell off and reminder that whatever can rally quickly can also fall quickly, we are seeing some renewed enthusiasm that has made me chuckle a little bit. Today's (Tuesday 16th of June) rebound has a narrative that is talking about how the "Consumer is back, and as a result, retail numbers are up 17%!" 1

Here's the deal. Retail sales is reported month over month and not year over year.2 So coming off of a national stay in place order to a structured lifting of the quarantine will of course produce better retail sales than when every person in the US who was not deemed necessary was restricted to their homes! In fact, speaking again with Tyler, we both agree that we will likely see some decent up days for June, but come July, it will get harder and harder to justify rebounds and higher expectations in returns with all the resulting data and reporting that is due out.

We have the coronavirus that is experiencing a resurgence and while some are undoubtedly based on new infections, some are also based on more people actually getting tested.3 Not a shock here at all, but again, the media would have you think otherwise.

We have the stimulus money released in March due to exhaust by July's end unless the Fed & Gov't seek a new round.4

We have the PPP loans that will be required to be spent unless new money is agreed on by the Gov't.5

We have the national lifting of the Quarantine in July unless that gets stalled or prolonged.6

We have the early stages of the Presidential Election Race start to show up on news feeds and the like.

We have the black lives matter protesting and conversation in its continuation.

These are to name but a few of the items we are working on configuring and figuring out with regards to our modeling and thought process for client accounts.

Does this mean we will experience another correction or retesting of the market lows? Not necessarily, but in our opinion, it will not provide a tailwind to the market conditions either.

Our strategy of rebalancing and investment inception for clients is still very much intact and continuing on its tiered path.


Till we speak again, enjoy the weather!



  1. https://www.retaildive.com/news/monthly-retail-sales-from-the-us-commerce-department/574252/
  2. https://www.reuters.com/article/us-usa-stocks/wall-street-surges-at-open-on-record-rise-in-may-retail-sales-idUSKBN23N1MI
  3. https://www.npr.org/sections/health-shots/2020/06/12/876224115/coronavirus-second-wave-nope-were-still-stuck-in-the-first-one
  4. https://www.forbes.com/sites/zackfriedman/2020/06/15/unemployment-benefits-end/#7df3c4bc4f6d
  5. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
  6. https://www.cnet.com/health/coronavirus-quarantine-and-lockdowns-are-starting-to-end-heres-how-reopening-will-work/

Markets React to Fed Report


The Week on Wall Street

Investor sentiment turned negative last week, amid an increasing number of COVID-19 cases in states where reopening has been underway as well as a subdued economic forecast from the Federal Reserve. 

The Dow Jones Industrial Average dropped 5.55%, while the Standard & Poor's 500 lost 4.78%. The Nasdaq Composite Index slipped 2.30% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, fell 3.10%.[1][2][3]

Reality Bites 

The optimism that drove stock prices higher these past several weeks slipped away on reports of a jump in COVID-19 cases, which sparked worries of a second wave slowing the economic recovery. A sober forecast for the economy by the Federal Reserve further dampened investor sentiment.


The week started upbeat with "reopening" stocks, e.g., financials, transportation, retailers, travel and leisure, and industrials, leading the way higher. But the momentum was soon lost as stocks turned mixed on Tuesday and Wednesday and then moved decidedly downward, with the S&P 500 losing 5.9% on Thursday.[4]


Amid a volatile week, big technology companies resumed their market leadership, with the NASDAQ Composite closing above 10,000 for the first time. Stocks pared their losses on Friday, but it wasn't enough.[5]


Fed Forecasts Economic Growth and Interest Rates

On Wednesday, the Federal Reserve said that it would keep the federal funds rate near zero and maintain its monthly purchases of Treasury bonds and mortgage-backed securities. 


The Fed also issued its forecasts for 2020-2022, indicating that it saw its benchmark federal funds rate remaining at zero, with inflation at 0.8% for 2020, increasing to 1.6% in 2021, then to 1.7% in 2022. Fed officials also expect the economy to shrink by 6.5% this year, with Gross Domestic Product growing 5% and 3.5% in 2021 and 2022, respectively. Their forecast for unemployment predicts a steady decline over the next 2½ years, from 9.3% by the end of 2020 to 5.5% in 2022.[6]



Tuesday: Retail Sales. Industrial Production.

Wednesday: Housing Starts. 

Thursday: Jobless Claims. Index of Leading Economic Indicators.


Source: Econoday, June 12, 2020

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.



Tuesday: Oracle (ORCL), Lennar (LEN).

Thursday: Kroger (KR).


Source: Zacks, June 12, 2020

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.


Quote Of The Week

Fountain Pen

"Never let your sense of morals get in the way of doing what's right." - Isaac Asimov

Recipe Of The Week

Fork and Knife

Kale Slaw

Serves 4 Ingredients:
  • 1 head of kale, stemmed and thinly sliced
  • ½ orange, juiced
  • ½ lemon, juiced
  • ½ cup sesame seeds
  • Salt and pepper
  • 1 Tbsp. extra-virgin olive oil
  • 1 Tbsp. apple cider vinegar
  1. Place kale into a salad bowl.
  2. With your hands, toss with orange juice, lemon juice, seeds, and salt.
  3. Let the kale sit a few minutes.
  4. Add the olive oil and apple cider vinegar, then mix well.
  5. Refrigerate until ready to serve.
Recipe adapted from FoodNetwork.com[7]


Tax Tips


A Compromise Can Be a Beautiful Thing

Sometimes taxpayers owe more money in taxes than they can afford to pay to the IRS. When this happens, you have the option to file an Offer in Compromise, which allows you to pay less than you owe. If you opt to pursue this route, here are some specific details you should know.


Affording the full debt amount. If you can afford to pay your full debt, you will, most likely, not qualify for an Offer in Compromise. Instead, you should pursue other options, such as setting up a payment plan with the IRS.


Filing all required tax materials. In order to apply for an Offer in Compromise, you must have filed all necessary tax paperwork with the IRS.


Making an initial payment toward your debt. The IRS may require you to pay an amount toward your owed taxes when you apply for Offer in Compromise. Any payments will apply to your debt.


You can find out if you qualify by using the IRS Offer in Compromise Pre-Qualifier Tool.



* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.



Tip adapted from IRS.gov[8]

Golf Tip


Avoiding a Back-Nine Blowup

The front nine goes really well for you: you have a couple of birdies, an eagle, or you par half the holes, and it looks like you're on pace to break 90, 80, or whatever your goal may be. On the back nine, that's all you can think about. You end up putting pressure on yourself, and your game quickly suffers.  


The lesson here is that you can only play one shot at a time. Thinking about your scorecard instead of the shot you need to play right now interferes with your focus and process. If you break 90 or 80, it won't be because of adrenaline or daydreaming. It will be because you maintain your focus. So, stick to your pre-shot routine, and focus on each shot at hand. Think of the hole in front of you, not the "whole" of your round, and your back nine may be as good as your front nine.

Tip adapted from LiveAbout.com[9]

Healthy Lifestyle

Medical Cross

Why It's Important to Stop and Smell the Roses

It's a cliché expression, which most of us have heard and likely used, but research has shown that there may be actual health benefits when you "stop and smell the roses." One might think that the benefits are solely based on the simple act of pausing and grounding oneself in the present, but there is a little more to the story. Just be mindful that any information here isn't a substitute for medical advice from your doctor. Researchers conducted a study of the information retention abilities of 50 6th graders. Each student was given identical lessons to study before bedtime. The other participants were instructed to have rose-scented incense on their desk while studying at home; the other participants, no fragrance. Seven days later, they took a test on the lesson. The students who studied with the rose fragrance took the test with rose incense. The fragrance-free group did not have incense. The rose group scored, on average, 30% higher on the exam than the other group. So, what does this mean? Certain fragrances, like rose, may help improve a person's memory recall when used in the right context. Just another reason to pause and enjoy one of nature's most beautiful flowers.  Tip adapted from MSN.com[10]

Green Living


Going Green for Baby


Are you or someone you know expecting or a new mom? It's now easier than ever to start baby off right with green and eco-friendly items.


One of the most effective and easiest ways to go green with a new baby is to use cloth diapers instead of disposable ones. Cloth diapers do cost more initially, but they will save you a ton of money in the long run, while also being kinder to the environment. Many parents also find that their babies have a far lower incidence of skin irritation and diaper rash when using cloth diapers.


When it comes to toys and teethers for your baby, look for items that are made from organic cotton and free from chemicals.



Tip adapted from GreenAmerica.org[11]

Share the Wealth of Knowledge!


Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!



Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.


Diversification does not guarantee profit nor is it guaranteed to protect assets.


International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.


The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.


The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.


The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.


Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.


Past performance does not guarantee future results.


You cannot invest directly in an index.


Consult your financial professional before making any investment decision.


Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.


These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative,

Broker dealer or Investment Advisor and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial professional for further information.


By clicking on these links, you will leave our server, as the links are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.

The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

 [1] The Wall Street Journal, June 12, 2020

[2] The Wall Street Journal, June 12, 2020

[3] The Wall Street Journal, June 12, 2020

[4] The Wall Street Journal, June 11, 2020

[5] CNBC, June 12, 2020

[6] CNBC, June 10, 2020

[7] FoodNetwork.com, June 12, 2020

[8] IRS.gov, June 12, 2020

[9] LiveAbout.com, June 12, 2020

[10] MSN.com, February 4, 2020

[11] GreenAmerica.org, June 12, 2020

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