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Market Commentary

June Monthly Market Commentary

Coming Back to Life


The healing process has begun. With important economic data for May now in the books, it looks like the economy hit bottom in April. Not only have most economic indicators rebounded in May, they have come back much more strongly than expected on Wall Street. That, together with some promising signs on the health front and muscular support from the Federal Reserve, stoked an astonishing rally in the stock market. After a debilitating 34 percent drop between February 19 and March 23, stock prices staged a record-setting 45 percent surge over the subsequent 50 days. As of late June, the S&P 500 stood just seven percent below its pre-Coronavirus record set in February.

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May Monthly Market Commentary

Don’t Fear Inflation


The Coronovirus recession has hit the U.S. with tremendous force. Following the sizeable 4.8 percent contraction in GDP during the first quarter – putting an end to the longest expansion on record—activity is poised to plunge by a depression-like 30-40 percent annual rate in the second quarter. The downturn is taking a horrendous toll on the job market. Employers shed 22 million workers in March and April, driving the unemployment rate up to almost 15 percent, the highest since the Great Depression. No part of the economy was unscathed. Even the stalwart health and education sectors saw meaningful job losses, as people avoided elective medical procedures and schools shut down.

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Weekly Market Commentary

July 6, 2020


Optimists who cling to the notion that the economy is poised for V-shaped recovery should have a festive July 4 holiday, as incoming data continue to exceed expectations. The week began with a report by the Institute for Supply Management, revealing that manufacturing activity is rebounding vigorously from its steep decline over the previous two months. For the first time since February, the ISM manufacturing index leaped over the 50 threshold, indicating that activity moved back into expansionary territory after hitting the lowest point in more than 20 years.

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Weekly Market Commentary

June 29, 2020


Mounting health concerns derailed the bulls on Wall Street, raising doubts about the durability of the nascent economic recovery and sending stock prices sharply lower this week. Governors that are seeing record numbers of new infections are having second thoughts about the pace of reopenings, particularly in states that were early to ease lockdown restrictions. In Texas, one of the earliest to ease restrictions, the move to the next phase of reopening was put on hold and other states are either tightening social distancing rules or urging residents to voluntarily abide by them. Echoing this trend, many businesses are also taking a step back; Disneyland is postponing its planned reopening, joining other high-profile names that are retrenching operations, such as Apple, in deference to the rise in outbreaks.

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Weekly Market Commentary

June 22, 2020


The financial markets continue to grapple with conflicting forces. On the positive side, the economy is steadily mending as the easing of lockdown restrictions allows shuttered businesses to reopen and enables households to unlock a torrent of pent-up demand. Factories are coming back to life, millions of workers are being rehired and cash registers are ringing again. Record low mortgage rates, the onset of spring and improving sentiment are spurring a burst of activity in the housing market. For the most part, economic indicators are showing more strength than expected, confirming that the worst of the COVID-19 recession is behind us.

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Weekly Market Commentary

June 15, 2020


Just as it seemed the worst of the economic downturn and Coronavirus was behind us, investors suffered another panic attack this week, sending stock prices to their biggest one-day loss since March 16 on Thursday. While the markets recovered somewhat on Friday, the reasons for the latest investor angst will likely weigh on investors for some time. Ironically, the primary catalyst that sent stock prices soaring over the past 2.5 months remains firmly in place. At its latest policy meeting this week, the Federal Reserve reiterated its firm commitment to keep interest rates at rock-bottom levels and retain its formidable pump-priming efforts, including purchasing copious amounts of Treasury and agency securities, as far as the eye can see. It also promised to activate and expand emergency lending facilities to keep credit flowing and help jump-start the ailing economy.

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Weekly Market Commentary

June 8, 2020


The financial markets were jolted by another unexpected development this week, although this time the surprise was a welcome one. To be sure, equity investors had effortlessly climbed a wall of worry over the past month, driving stock prices up by more than 40 percent from their lows in late March, recovering all but about 5 percent of the debilitating plunge over the previous month. It was the sharpest rally over a 50-day period ever recorded and it continued into this week, overcoming additional challenges posed by roiling protests throughout the nation and an increase in tensions with China over its dealing with Hong Kong. These latest growth deterrents would only complicate the economy’s ability to recover from the deep slide in activity caused by the coronavirus pandemic.

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Weekly Market Commentary

June 1, 2020


As lockdown restrictions and shelter-in-place mandates gradually ease across the U.S., the economy is slowly regaining its footing. Hotel bookings are up; restaurants are serving customers again, albeit mostly outdoors; some beaches are reopening and the roads are filling up with drivers heading for vacation spots; states are allowing some nonessential businesses to open their doors, and are poised to phase in more reopenings in the coming weeks. Even factory floors are beginning to hum again. By all accounts, the worst stage of the Great Coronavirus Recession is behind us.

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