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Market Commentary

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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April Monthly Market Commentary

R.I.P.: The Longest Expansion


It won’t be confirmed for at least several months, but the U.S. is almost certainly hurtling into a recession. A little over a month ago, when the COVID-19 Coronavirus first hit the headlines, we, along with most economists, thought the nation could weather the storm if proper policies were quickly implemented and the outbreak contained before becoming a global pandemic that would invade American shores with a devastating blow. Bolstering this optimistic assessment, the U.S. economy was riding high before the shock struck like a thunderbolt. The job market was humming, consumer confidence remained elevated and the financial markets were pricing in continued growth in activity and earnings, although at a diminished pace. Indeed, stock prices hit a record high on February 19.

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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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Weekly Market Commentary

May 26, 2020


Now that all 50 states have at least partially reopened for business, optimists will be searching for “green shoots” confirming that the economy is poised for a recovery that President Trump believes will be the “transition to greatness.” The search will not be entirely in vain as the U.S. economy is slowly coming back to life. Restaurants are reopening and the weather is turner balmier, luring people out of their homes and engaging in recreational activities. Sales of bicycles are surging, consumers are snapping up outdoor gear and accessories and traffic on highways is increasing. With department stores reopening shoppers are unleashing pent-up demand; TJ Maxx reports that sales of reopened stores in the first week of May were greater than a year ago.

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Weekly Market Commentary

May 18, 2020


As the debate swirls over how swiftly the economy can recover from the COVID-19 recession, the uphill climb keeps getting steeper. For sure, the deep dive in payrolls has yet to find a bottom, as another 3 million laid-off workers filed for unemployment benefits in the latest week, bringing the cumulative total of new claims to more than 36 million since March 21. The number of new weekly applications is ebbing, but the ranks of the unemployed are poised to swell further and likely drive the unemployment rate to over 20 percent, rivaling the highs of the 1930s depression.

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Weekly Market Commentary

May 11, 2020


The avalanche of grim news continued to overwhelm the economic landscape this week, headlined by a jobs report that was about as awful as expected. Other indicators this week offered no comfort, as measures of manufacturing and service-sector activity posted historic monthly declines in April. These are just the first of a series of upcoming economic barometers that collectively will depict an economy in freefall this quarter, weighed down by government lockdown restrictions aimed at curtailing the spread of COVID-19, as well as public safety fears that are keeping households locked in their homes and their wallets zippered up.

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Weekly Market Commentary

May 4, 2020


Since the end of the Great Recession, the Federal Reserve has consistently overestimated the strength of the U.S. economy, delivering forecasts of growth and inflation that almost always exceeded actual results. That string of optimistic forecasts has come to a crashing end, done in by a pandemic that has profoundly chastened the central bank. Forget any language that might hint at a V-shaped recovery. In the policy statement following the FOMC meeting this week, the Fed’s concern over future prospects for the economy couldn’t be more dire. “The ongoing public health crisis will weigh heavily on economic activity, employment and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 0.25 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

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