August 2020
Market Update

“Massive stimulus and an accommodating Federal Reserve have allowed much of the market to recover.
But can it continue?” 

The S&P rose 4.8% for the month of July and turned positive for the year, a feat that would have seemed impossible had anyone known at the start of 2020 that we would have a pandemic and all its assorted consequences. Massive stimulus and an accommodating Federal Reserve have allowed much of the market to recover. But can it continue? Can we fully reopen our economy, get back to normal, get the kids back to school? Or is the market the only thing that is recovering? 

Earlier this week we got the official GDP (Gross Domestic Product) results and, even though it was expected to look ugly, a decline of 32.9% for the last quarter was still a difficult number to digest as it represented the largest decline of GDP … ever. First time claims for unemployment have persisted in excess of 1 million claims for 19 straight weeks; they have even pushed higher each of the last three weeks, likely coinciding with renewed lock-downs in several states that had seen surges in cases of COVID. Throw in continuing violent domestic protests, a contentious (more than usual) run-up to the presidential election, increasing bankruptcies, concerns over rental evictions, getting our kids and teachers back to school safely … there seems to be no end of the things that can worry us today and could eventually weigh on these markets. 

The Federal Reserve can take most of the credit for helping investors to recover but Congress is in charge of helping the taxpayers. The initial round of stimulus checks, the supplemental unemployment benefits, the stays for rental evictions, all were part of their efforts to provide safety nets for the millions of affected workers. The supplemental unemployment insurance expired Friday. There does seem to be some awareness of the gravity of the situation as we do see lawmakers working over the weekend to parse out a solution. And it is necessary. The unemployment level and the continued rise in the virus cases simply leave too many families imperiled. 

Assuming a deal can be struck quickly in Washington, attention can focus on the very positive results coming from several of the companies working to find a vaccine. Astra Zeneca, Moderna, and Pfizer, all had positive responses in their latest studies. We should see the next round of results in early October, which will give us more insight into what may yet be possible in conquering this thing. No doubt hope for a fast answer has also helped to buoy markets. Copperwynd Financial, LLC is a Registered Investment Advisor. Advisory services are only offered to clients or prospective clients where Copperwynd Financial, LLC and its representatives are properly licensed or exempt from licensure. This brochure is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Copperwynd Financial, LLC unless a client service agreement is in place. 

This week the Federal Reserve Chairman, Jerome Powell, reiterated their position that they will keep the printing presses at work and interest rates low for potentially years. Along with the next round of support for the American family, these policies should continue to support stock prices, albeit with heightened volatility, especially as we draw closer to the presidential election. In your portfolios here, we continue to be fully invested in all models but are mindful of the disconnect that markets seem to have with our economy and we remain vigilant. 

Thank you for the faith you place in us to help you navigate these challenging times. We hope you and your family are enjoying some time together this summer – and staying cool!. 

If you have questions, please contact us.

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To download the September 2020 Newsletter: CLICK HERE