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Wealth Management Market Update

COVID-19 Investment Update

Updated May 29, 2020

As the financial impact of COVID-19 continues to unfold, please know that our investment team is committed to helping you achieve your goals. We are constantly monitoring and evaluating the situation to provide the most relevant information to our clients.

Information is changing quickly, and, as always, we are available for personal consultations. This page is another resource, and we will be updating it regularly with information and insights.

What is the latest outlook for the economy?

Unsurprisingly, economic data continues to be historically negative. Durable goods orders were down 17.2 percent in April. Personal consumption expenditures were down 13.6 percent. First-quarter GDP was revised down, from -4.8 percent to -5.0 percent.

One bright note: continuing jobless claims fell by almost 4 million for the week, to a little over 21 million. This number was actually expected to rise. If this trend were to continue, it would be a sign that Americans are going back to work at a quicker pace than economists were predicting. The May unemployment data will be released next week. The unemployment rate is expected to rise to 19 percent, up from April’s 14.7 percent. Experts hope that the May unemployment rate will be the low point.

Where do the markets stand right now?

Equity markets had another strong week, following last week’s big gains. Markets are focused on economic reopenings and continued support from the Federal Reserve. The New York Stock Exchange reopened its trading floor this week. Some of the sectors that have lagged the market since the March lows, such as banks, out-performed. Corporations continue to boost balance sheets by issuing debt. U.S. companies have issued more than $1 trillion in bonds this year, a level that was not reached until November in 2019.

Why are U.S.-China tensions heightening and what are the effects?

U.S.-China tensions continued to heighten as China moved to end Hong Kong’s autonomy.  Beijing’s unilateral decision has been condemned internationally. This follows last year’s protests in Hong Kong. U.S.-China relations have suffered this year, as the U.S. has been critical of the Chinese handling of the COVID-19 virus outbreak, which originated in Wuhan, China. At this point, however, it does not appear the Phase 1 trade deal is in jeopardy.

Will there by more aide from the U.S. government?

The House passed an additional $3 trillion fiscal stimulus bill. However, the Senate will probably not vote on the package. It is more likely that a smaller bill focusing partially on help for state and local governments will be negotiated over the next several weeks.

What should I be doing with my investments?

We encourage you to pay attention to the latest developments, but not to lose sight of your long-term investment strategy. Reach out to our investment team to discuss your options and reaffirm your timeline and goals. Call our investment team at (518) 415-4401.