The economic struggles in our country are among the worst we’ve ever seen. In April, a record 20 million people lost their jobs, and 36 million people have filed for unemployment since the COVID-19 pandemic struck in mid-March. Record drops in consumer confidence, manufacturing and spending are all adding to the immediate economic fallout.
Clothing sales are down 89%, furniture sales down 66%, and restaurant sales down 49% from this time last year, according to the United States Census Bureau. Yet, as F. Scott Fitzgerald wrote, these many single defeats won’t necessarily add up to the final defeat. Our country has survived many trying times before, and we are starting to see glimmers of hope on both the medical and economic fronts. Our resolve and fortitude will once again shine, as we head toward better times in the second half of 2020.
More testing for COVID-19 is needed to help identify infected people and to stop the virus from spreading. As testing has soared, the number of positive COVID-19 results as a percentage of total tests has trended lower. In addition, doctors have developed a “toolbox” of drugs to help provide patients a better chance at survival. Although a vaccine could still be a year or more away, human drug trials are underway with encouraging initial results.
However, in the face of the devastating loss of human life and historically weak economic data, the S&P 500 Index at its recent peak, has experienced one of its greatest short-term rallies ever, up more than 30% from the March 23 lows. Based on historical trends, a warranted correction in stocks over the coming months may be possible. Stock valuations are more expensive, tensions are building between the United States and China, the stock market’s momentum is showing signs of waning, and we’re entering the normally weak summer months—all of these are reasons to be alert but not a reason to abandon your investment strategy. Markets are resilient and we will get to the other side of this.
Stay safe, and don’t hesitate to reach out to us if you have any questions or concerns.
Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.
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