Message from Jon
Markets & What We Know Webinar:
SATURDAY June 20th, 2020
10am to 10:30am EST
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!
Markets React to Fed Report
WEEKLY UPDATE - JUNE 15, 2020
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%.