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Market Commentary

August Monthly Market Commentary

The Recovery Enters Perilous Stage


The rebound in jobs, production and consumer spending in recent months strongly indicates that the recovery from the harsh COVID-19 recession is underway. To be sure, the recovery may be cut short if the escalation of virus cases in many parts of the nation turns into a full-blown second wave or if the lapsed fiscal relief is not replenished with some additional government aid in the coming weeks. The vigorous rebound in key economic measures give the false impression that the economy is healthy enough to stand on its own two feet. It is not. The fuel for the growth engine is running out and it is only a matter of time before its cylinders begin to misfire as long as the health crisis is not effectively dealt with.

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July Monthly Market Commentary

The Uneven Impact of COVID-19


Just as government-mandated lockdowns sent the economy into a tailspin in March and April, the lifting of restrictions and the reopening of businesses propelled activity higher in May and June. In fact, the rebound in jobs, spending and other key indicators has been stronger than expected. But that initial growth spurt is in danger of sputtering out, as the resurgence of the Coronavirus in the majority of states is prompting governments to either reimpose social distancing restrictions or delay the reopening process. The response has been uneven and politically charged, but it has cast a dark cloud over the economic outlook.

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Weekly Market Commentary

September 21, 2020


The Federal Reserve placed a megaphone over the bully pulpit this week, shouting as loud as it can that monetary policy will do whatever it takes to keep the economy on the recovery track. There was no ambiguity in the statement following the policy-setting meeting that concluded on Wednesday, nor in the comments by Fed chair Powell in his post-meeting press conference. Simply put, the Fed’s forward guidance was clear: interest rates will remain at rock-bottom levels at least until the end of 2023 or when the job market is fully healed and inflation rises to above two percent for a period of time. If that doesn’t do the job, the central bank has other tools at its disposal to maximize its effort, including ramping up asset purchases, utilizing lending facilities and putting even more oomph into its forward guidance.

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Weekly Market Commentary

September 14, 2020


The abrupt reversal this week of the stunning 37.5 percent surge in the S&P 500 may or may not mark the beginning of the end of the torrid market rally that began on March 23. Before Friday’s modest comeback, the benchmark index had contracted by 7.0 percent, just short of the 10 percent that would place it in correction territory. It’s unclear if the setback reflects a widely anticipated adjustment from an overbought condition, as many analysts believe, or something more fundamental that will play out in coming weeks. Many pundits have lost their shirts, not to mention their reputation, by making firm, but misguided, assertions that they know which way the market is heading.

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Weekly Market Commentary

August 31, 2020


With both conventions now in the rear view mirror, the markets’ attention will shift from the race for the White House to the Halls of Congress, where legislators need to forge a pandemic relief bill before they leave on the campaign trail. Simply put, the window of opportunity to get a bill passed is narrowing, even as the need for renewed fiscal support is growing. That might not seem obvious in the recent spate of economic data, which do not depict an economy that is falling off a cliff. Consumers continue to spend, stronger orders for durable goods is spurring production and housing activity is roaring ahead. But these bullish indicators are still riding the coat tails of the fiscal stimulus passed in the spring, and that fuel is quickly running out.

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Weekly Market Commentary

August 24, 2020


Following two months of mostly upside surprises, recent economic data are coming down to earth. For sure, none suggest that the recovery has hit a wall. The economy remains on a positive trajectory and broad measures for the current quarter will show that it staged an impressive growth rate for the period. Indeed, taking stock of events over the past month, there were still more hits than misses. Retail sales and home construction, for example, are back to pre-pandemic levels, the job market is still growing payrolls and factories are turning out more product. Likewise, the stock market recovered all of its precipitous February/March losses and then some, with the S&P 500 hitting new highs this week.

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Weekly Market Commentary

August 17, 2020


The congressional clock stopped ticking on Thursday, as the Senate adjourned and both chambers are not scheduled to return until after Labor Day. Hence, any hopes for a pandemic relief bill anytime soon fell by the wayside, even as the economy appears to be losing momentum and virus cases are rising in many parts of the nation. This confluence of events does not bode well for activity in coming months, notwithstanding a recent spate of positive economic reports. To be sure, Senate Majority leader, Mitch McConnell, indicated that the Senate could swiftly be brought back into session if a breakthrough in negotiations takes place. But the acrimony and wide gap in proposals between the parties make that a remote prospect.

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Weekly Market Commentary

August 10, 2020


With the release of the highly anticipated jobs report on Friday, the argument over whether the economic glass is half full or half empty has become the hot topic of the day. As expected, job gains did slow in July from the vigorous increases seen in May and June. The 1.8 million increase in nonfarm payrolls compared to advances of 4.8 million and 2.7 million in those two months, respectively. But the slowdown was not as harsh as some of the more pessimistic forecasts, which pointed to a possible net loss of jobs during the month. In fact, it was a tad better than the consensus forecast of about 1.5 million.

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Weekly Market Commentary

August 3, 2020


This was not a week to search for good news on the economic, health or political fronts. Developments in all three areas couldn’t be more downbeat, with the economy bordering on the catastrophic and the political becoming the theater of the absurd. Meanwhile, the health news continues to darken, with virus cases in several states climbing and putting more obstacles in the recovery path. As the Federal Reserve said in its statement from this week’s policy meeting, “The path of the economy will depend significantly on the course of the virus.” On that score, the Fed is anything but optimistic, as Chairman Powell warned that the resurgence in virus cases is already weighing on the recovery and urged Congress to provide more aid to sustain growth.

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