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Market Commentary

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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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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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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Weekly Market Commentary

July 27, 2020


The economy is awash in available credit and the only ones borrowing and spending it are the U.S. government and, to a lesser extent, homebuyers. The latter may soon be scaling back their appetite for new loans as heightened anxiety over job security, a resurgence in cases of COVID-19, deteriorating affordability and scarce supply of homes for sale are all conspiring to restrain housing activity. Yet, the funds keep on coming, with the Fed keeping its foot on the monetary accelerator, hoping that bringing the economic horse to the trough will encourage it to drink. So far, that’s been a fruitless exercise.

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Weekly Market Commentary

July 20, 2020


The streak of upside surprises provided by incoming economic reports continued unabated this week, highlighted by robust increases in retail sales, industrial production and even consumer prices, all for the month of June. Like the jobs report released two weeks ago, these stronger-than-expected reports confirm that the economy’s performance in the second quarter will not be as abysmal as thought a month or so ago. From our lens, we see real GDP declining by an annual rate of 28 percent, a slight haircut from the 30 percent tumble expected prior to the latest retail sales report, and a meaningful improvement from the near-40 percent plunge thought likely earlier in the quarter.

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Weekly Market Commentary

July 13, 2020


Virtually every state in the nation is grappling with the Hobson’s choice of reopening the economy and nurturing growth, or retaining lockdown restrictions and potentially short-circuiting the nascent recovery. Until recently, the growth nurturers had the wind at their backs, as low or receding cases of the virus encouraged a broader swath of states to aggressively reopen for business. Not surprisingly, they were amply rewarded by the response, as the economy took off in and May and early June, highlighted by record-setting rebounds in jobs and consumer spending.

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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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