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Weekly Market Commentary

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Weekly Market Commentary (April 29, 2020)
 
The Markets
  
We live in interesting times.
 
There is discussion about whether the saying, "May you live in interesting times," is a blessing or a curse. At this point in 2020, we all understand why.
 
Last week, the world watched in consternation as the price of oil, specifically West Texas Intermediate crude oil, dropped into negative territory. The price moved below zero because a purchase date coincided with a lack of storage space. As a result, the owners of the oil had to pay to have it taken off their hands, reported Ben Levisohn of Barron's.
 
Oil prices recovered on Wednesday. Global oil producers have promised to reduce output, which would realign supply and demand, but it has yet to happen, reported Evie Liu of Barron's. The delay may reflect a hope that coronavirus restrictions will ease, economies will begin to reopen, and demand for oil will increase.
 
Investors were understandably unsettled by oil prices, and U.S. stocks lost value early in the week. As oil stabilized, U.S. stocks pushed higher. The rebound in stocks stalled on news that trials for a potential COVID-19 treatment had produced disappointing results.
 
Thursday's unemployment data showed 4.4 million people filed for unemployment benefits the previous week. That brought the number of unemployed Americans to more than 26 million, according to Jeffry Bartash of MarketWatch.
 
Earnings, which reflect companies' profits, remained less than robust, as expected. "The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings decline for the first quarter is -15.8 percent..." reported John Butters of FactSet.
 
The energy sector finished the week in positive territory.
 

Data as of 4/24/20
 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) -1.3% -12.2% -3.1% 6.1% 6.0% 8.9%
Dow Jones Global ex-U.S. -1.9 -21.8 -17.4 -4.1 -3.4 -0.1
10-year Treasury Note (Yield Only) 0.6 NA 2.5 2.3 1.9 3.8
Gold (per ounce) 1.4 12.7 34.9 11.2 7.4 4.0
Bloomberg Commodity Index -3.0 -25.5 -26.0 -10.4 -9.9 -7.8
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
 
Stimulus Checks Are Arriving. The Internal Revenue Service (IRS) has distributed $157.9 billion through 88 million stimulus payments, according to Andrew Keshner of MarketWatch.
 
If you have recently lost a job, or you're having difficulty paying bills, your check may already be spent. However, if you're still working, or remain financially comfortable, think carefully about how you want to spend your checks. The money could be used to improve your long-term financial outlook or provide support to people in need. For instance, you could:
 
  • Contribute to an emergency fund. It's a sound idea to have savings equal to three to six months of expenses in a rainy-day fund in case something unexpected happens, such as a coronavirus quarantine.
 
In 2019, the Board of Governors of the Federal Reserve reported just 61 percent of adults had enough savings set aside to cover a $400 unexpected expense. The report stated, "During 2018, one-fifth of adults had major, unexpected medical bills to pay, with the median expense between $1,000 and $4,999. Among those with medical expenses, 4 in 10 have unpaid debt from those bills."
 
  • Pay off high-interest rate debt. If your income is secure, using your check to reduce high interest rate debt may be a good choice.
 
In early April, the average interest rate assessed on credit cards accounts with unpaid balances was 16.61 percent. Reducing your balance, could significantly reduce the amount of interest you pay. In addition, if something unexpected happens, having a higher level of available credit could be beneficial.
 
  • Donate the amount. If you are confident you will not need the money, consider making a donation. A donation can take many forms. You could help a loved one pay bills or provide support to a church or charity.
 
"...many charities and nonprofits are still struggling. Donations to some churches have plummeted, and many charities have had to cancel crucial fundraising events such as galas, bike races, and walkathons," reported the Associated Press.
 
What are you planning to do with your stimulus check?
 
Weekly Focus - Think About It
 
"Do you think you remember a movie in which a knight gallops toward a castle just as its drawbridge is going up, and his white horse jumps the moat in one glorious airborne leap?
 
...we're that rider. Chasing us is the dreaded coronavirus. We're in midair, hoping we make it to the other side, where life will have returned to what we think of as normal. So, what should we do while we're up there, between now and then? Think of all the things you hope will still be there in that castle of the future when we get across. Then do what you can, now, to ensure the future existence of those things."
                                                                                                                                              --Margaret Atwood, Time Magazine, April 16, 2020
 
Best regards,
 
Lee Barczak
President
 
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. *Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * The Standard & Poor's 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision.
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Weekly Market Commentary (April 21, 2020)

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The Markets
 
Last week's economic data was about what you might expect in the midst of a virus crisis that has shut down businesses and forced people to stay home:
  • Retail sales were down 8.7 percent in March. Retail sales track demand for everything from clothing to refrigerators. The March decline was the worst monthly performance on record, according to Ben Levisohn of Barron's.
  •  Oil prices fell further. Saudi Arabia, Russia, and other nations agreed to reduce oil production, but that may not be enough to steady prices. The Economist explained, "Global demand may fall by 29 [million] barrels a day this month, three times the OPEC deal's promised cuts."
  •  Earnings season began with a whimper. Just a sliver (9 percent) of the companies in the Standard & Poor's 500 Index have reported first quarter earnings. So far, blended earnings (actual results for companies that have reported plus estimated results for companies that have not) are down 14.5 percent for the first quarter, reported John Butters of FactSet.
 
There were some bright spots, though, that boosted optimism in financial markets.
 
New York state, where more than 13,000 residents have died as a result of the coronavirus, may be entering a period of deceleration. The number of hospitalizations and deaths moved lower late last week, reported MarketWatch.
 
Germany announced it is slowly beginning to reopen shops and schools. Guy Chazan of Financial Times reported, "Germany has managed to contain coronavirus more effectively than other European countries, partly thanks to a comprehensive testing regime that allowed authorities to identify and isolate those infected with the virus at an early stage. It has the capacity to run 650,000 tests a week."
 
Major U.S. stock markets moved higher last week and expectations for future volatility moved lower.
 

Data as of 4/17/20
 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 3.0% -11.0% -0.9% 7.0% 6.8% 9.2%
Dow Jones Global ex-U.S. 1.2 -20.3 -16.4 -3.0 -2.7 0.2
10-year Treasury Note (Yield Only) 0.7 NA 2.6 2.3 1.9 3.8
Gold (per ounce) 0.7 11.1 32.7 9.8 7.1 4.1
Bloomberg Commodity Index -2.2 -23.2 -24.0 -10.3 -9.4 -7.4
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
 
FIVE things to do if you just lost your job. During the past four weeks, 22 million Americans have filed for unemployment benefits. It's an enormous number that reflects the staggering magnitude of job losses due to the coronavirus.
 
Job loss is painful in any circumstances. It's particularly intimidating when it occurs in the midst of a pandemic and economic downturn. If you are recently unemployed, here are five things you can do:
 
  1. Review your health insurance options. You may have the option to keep your employee health plan for a period of time. It's temporary and it can be expensive. You pay the entire premium, including the amount your employer used to pay. It may be less expensive to join a spouse's plan, if that is an option. Another alternative is to purchase a plan through the Health Insurance Marketplace. Losing a job qualifies you for a special enrollment period.
 

2. Get financial advice. We'll help you evaluate your financial position by reviewing monthly expenditures and available cash, so you know how long you can make ends meet with current financial resources.

 
It may be possible to reduce monthly spending relatively quickly. Banks, credit card companies, and other institutions are allowing customers who call to defer payments because of COVID-19 shutdowns.
 

3.File for unemployment benefits. Ratchet up your patience. State unemployment benefit systems have been overwhelmed by the sheer number of applicants. Completing online forms and filing for weekly payments can take a significant amount of time, so file as soon as you can and be patient.

 

4. Update your resume and LinkedIn profile. Revamp your resume. Polish your LinkedIn profile. Make sure your profile is 'public' so people can find you. Join groups that share your interests and passions. Learn more about companies you may want to join.

 

5.Reach out. Start connecting with friends and colleagues. Let them know you are looking for your next opportunity.

 
Consider doing volunteer work or freelancing until you find a new position. Work of any kind will help you stay busy during the times you're not hunting for a new job.
 
Weekly Focus - Think About It
 
"Far and away the best prize that life offers is the chance to work hard at work worth doing."
--Theodore Roosevelt, 26th American President
 
Best regards,
 
Lee Barczak
President
 
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. *Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * The Standard & Poor's 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision.

 
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Weekly Market Commentary (April 14, 2020)

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The Markets
 
Why is the stock market doing so well when the COVID-19 pandemic has yet to peak?
 
At the end of last week, the Centers for Disease Control and Prevention reported the United States remains in the acceleration phase of the coronavirus pandemic. This phase ends when new cases of COVID-19 level off. The next phase should be a period of deceleration, and the number of cases should decline.
 
There are several different models estimating when a peak may occur, and estimates vary from state to state, according to Sean McMinn of NPR. For instance, the model cited by the White House is from The Institute for Health Metrics and Evaluation at the University of Washington. It assumes social distancing measures will stay in place through the end of May. In this circumstance:
 
  • New York may have peaked April 9
  • California may peak April 15
  • Pennsylvania on April 17
  • Texas on April 28
  • North Dakota on April 30
  • Wyoming on May 2
 
All other states have peaked or are projected to peak on or before May 2, 2020.
 
Despite estimates suggesting the virus will continue to spread and businesses may not reopen fully until the end of May, U.S. stock markets moved significantly higher last week. Al Root of Barron's reported:
 
"The S&P 500 index rose 12 percent...its best week since 1974 - and finished 25 percent off its March low. The corresponding gain for the Dow Jones Industrial Average was 13 percent, up 27.8 percent from its low. The Nasdaq Composite jumped 10.6 percent, raising it 23 percent off its low."
 
Many factors affect U.S. stock market performance, including company fundamentals (how companies perform), investor sentiment (what investors think), consumer sentiment (what consumers think), monetary policy (what the Federal Reserve does), and fiscal policy (what the federal government does). The driver supporting stock market performance last week was Federal Reserve monetary policy. Axios explained:
 
"The Federal Reserve announced Thursday it will support the coronavirus-hit economy with up to $2.3 trillion in loans to businesses, state and city governments...The slew of new Fed programs comes as economic conditions deteriorate at an unprecedented pace...and another 6.6 million Americans filed for unemployment benefits this week."
 
There continues to be uncertainty about how the U.S. economy will recover. As a result, we are likely to see markets remain volatile.
 

Data as of 4/9/20
 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 12.1% -13.7% -3.1% 5.8% 5.9% 8.9%
Dow Jones Global ex-U.S. 8.0 -21.3 -16.8 -3.2 -2.8 -0.1
10-year Treasury Note (Yield Only) 0.7 NA 2.5 2.4 2.0 3.9
Gold (per ounce) 4.2 10.4 29.0 10.4 7.1 3.8
Bloomberg Commodity Index 2.1 -21.5 -23.2 -9.6 -8.5 -7.3
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
 
Boredom sparks creativity. Early last year, Time Magazine cited a study that found boredom may trigger creativity. Time explained, "In the study, people who had gone through a boredom inducing task - methodically sorting a bowl of beans by color, one by one - later performed better on an idea-generating task than peers who first created an interesting craft activity."
 
Recent social media and news reports are providing anecdotal evidence that supports the idea. For example, people are:
 
  • Creating art galleries for pets. A couple of bored 30-year-olds built a mini art gallery for their pet gerbils while on quarantine. The Good News Network reported, "The tiny space was furnished with carefully curated rodent-themed takes on classic works of art - including the 'Mousa Lisa.'"
  • Playing real-life versions of children's games. In Wales, a nursing home has seniors practicing social distancing while playing a real-life version of Hungry, Hungry Hippos. "Instead of using hippo mouths to capture the plastic balls, however, the women brandished baskets on sticks...," reported Good News Network.
  • Transforming their homes. One clever person transformed glass patio doors into stained glass using painters tape and washable markers, reported BoredPanda.
  • Cooking together. Quarantine cooking clubs are catching on. For instance, one club, "...assigns a new dish every weekend; a last meal of one of the celebrities who has been a guest on the James Beard Award nominated podcast, Your Last Meal," reported the MyNorthwest podcast.
 
If you're looking for something to do, the J. Paul Getty Museum (The Getty) in Los Angeles recently asked their followers to select a favorite work of art from their collection and re-create it using three everyday household items. The museum's blog reported on the results so far:
 
"You've re-created Jeff Koons using a pile of socks, restaged Jacques-Louis David with a fleece blanket and duct tape, and MacGyvered costumes out of towels, pillows, scarves, shower caps, coffee filters, bubble wrap, and - of course - toilet paper and toilet [paper] rolls."
 
Weekly Focus - Think About It
 
"I wanted a perfect ending. Now I've learned, the hard way, that some poems don't rhyme, and some stories don't have a clear beginning, middle, and end. Life is about not knowing, having to change, taking the moment and making the best of it, without knowing what's going to happen next."
                                                                                                       --Gilda Radner, Comedian
 
Best regards,
Lee Barczak
President
 
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. *Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * The Standard & Poor's 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision.
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Weekly Market Commentary (April 8, 2020)

Blog
 
 
The Markets
  
In the Wizard of Oz, Dorothy says to her little dog, "Toto, I've a feeling we're not in Kansas anymore." Today, many of us understand Dorothy's trepidation and uncertainty better than ever before.
 
COVID-19 has changed our world in ways previously unimaginable. In many states, Americans shelter at home, venturing out for groceries, medicine, and other essentials. Parents have become teachers guiding online schoolwork, often while balancing their own work and online meetings. We are learning to manage the loneliness, frustration, and anxiety that accompany quarantine conditions.
 
We are also learning to cope with rapid and unexpected financial upheaval. In less than a month, businesses have adapted to changed circumstances. Some are laying off or furloughing workers. Others have put equipment and technology in place to allow continued or remote operations. Our collective hope is the curve will flatten.
 
Despite solid performance early on, the first quarter of 2020 was one of the worst ever for U.S. stock markets.
 
At the start of the quarter (and the year), investors were confident despite concerns about trade. Many asset classes finished 2019 on a positive note. The Standard & Poor's 500 Index and the Dow Jones Global (ex U.S.) Index both finished the year with double-digit increases. Bonds and gold delivered positive returns, too.
Markets stuttered in January when conflict arose between the United States and Iran but recovered quickly as tensions eased. Soon thereafter, the United States and China reached a preliminary trade agreement. Investors were thrilled and the Dow Jones Industrial Average surpassed 29,000 for the first time ever.
 
It wasn't until late January that news of the coronavirus outbreak in China began to unsettle investors. Many were concerned that precautions designed to slow the spread of the virus could also slow China's economic growth and, by extension, global economic growth.
 
Major U.S. stock indices continued to gain value in February. At the time, Ben Levisohn of Barron's reported, "They say the best defense is a good offense. The U.S. stock market may offer both... loading up on U.S. stocks looks like the right move. That's because the world's problems [coronavirus in China and lackluster economic growth in the European Union] might actually make U.S. markets more attractive."
 
The early-March decline in U.S. stock markets was triggered by price wars in the oil market. Natasha Turak of CNBC reported that Saudi Arabia and Russia failed to reach agreement about output, which sparked a price war. The subsequent supply and demand imbalance - the market was glutted with oil in a time of falling demand - caused oil prices to drop sharply.
 
Demand for oil continued to drop as coronavirus spread into more countries. U.S. stocks reflected concerns that COVID-19 could become the catalyst for recession in the United States and elsewhere, reported Heather Long and colleagues at The Washington Post. Uncertainty increased when, during U.S. earnings calls, many companies were unable to quantify the potential impact of coronavirus on their businesses.
 
As the potential human toll of the virus became better understood, many states closed non-essential businesses and issued shelter-in-place orders. Investors began selling shares to ensure they had cash available. As a result, shares were sometimes sold at low prices with little regard for long-term performance potential.
 
Nicholas Jasinski of Barron's reported monetary and fiscal stimulus, including relief for individuals and businesses, has helped restore some optimism to markets. In addition, greater certainty about the potential dimensions of the virus may be restoring confidence. He wrote:
 
"Now, investors seem to be moving on to the next stage of the coronavirus market: picking winners and losers. The correlation between stocks in the S&P 500 index has retreated from its recent near record-high levels, a sign that investors may be considering them more on their own merits. And day-to-day index volatility has fallen significantly since the Dow's three-day surge."
 
It is possible we have passed peak uncertainty. While the exact dimensions of the coronavirus remain unknown, investors' fears have begun to recede. Barron's reported the CBOE Volatility Index (VIX), Wall Street's fear gauge, closed below 50 last week for the first time since early March.
 
Major U.S. stock indices finished last week lower, capping the worst monthly and quarterly performance in U.S. stocks since the 2008 financial crisis.
 

Data as of 4/3/20
 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) -2.1% -23.0% -13.4% 1.8% 3.7% 7.7%
Dow Jones Global ex-U.S. -3.1 -27.1 -22.9 -5.8 -4.0 -0.8
10-year Treasury Note (Yield Only) 0.6 NA 2.5 2.4 1.9 4.0
Gold (per ounce) -0.3 5.9 25.0 9.0 5.9 3.6
Bloomberg Commodity Index -0.8 -23.1 -24.3 -10.6 -9.2 -7.5
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
 
Humor for trying times. In her article, Yes, this business still has your email! Here's how we're responding to covid-19!, Alexandra Petri of The Washington Post skewered tone-deaf communications. Here is an excerpt:
 
"We hear that last week's email saying we would for the first time be sanitizing all the shared equipment was not what people wanted right now, exactly! Message received loud and clear! So we put our heads together to think of a way to come together and serve this cherished community...You may be thinking, 'I am not part of the Sam's Kayak Family, and to be completely honest, I did not know you had my information!' To that we say: We hear you, we see you, and we are so proud to have you in the Sam's Kayak Family."
 
Weekly Focus - Think About It
 
"Fate is like a strange, unpopular restaurant filled with odd little waiters who bring you things you never asked for and don't always like."--Lemony Snicket, Author
 
Best regards,
Lee Barczak
President
 
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. *Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * The Standard & Poor's 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision.
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Weekly Market Commentary (April 2, 2020)

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Weekly Market Commentary (April 2, 2020)
 
The Markets
 
The United States set some records last week.
 
First, we became the epicenter of the COVID-19 pandemic. Popular Science explained:
 
"An increase of 15,000 known cases in just one day pushed the United States past Italy and China, making it the new epicenter of the pandemic...Experts suspect the actual number of U.S. cases is much higher than currently reported...the United States has tested a far lower percentage of its large population than other hard-hit countries."
 
On Friday, March 27, the Centers for Disease Control (CDC) reported there were 103,321 confirmed cases and 1,668 deaths in the United States.
 
Second, as businesses across the country closed, leaving many workers without income, first-time claims for unemployment benefits hit an all-time high of 3.3 million. The previous record of 695,000 was set in 1982, during one of the deepest recessions the United States had experienced to date.
 
Third, Congress passed the biggest aid package in history. The $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES) was signed into law last week. The CARES Act authorizes financial support for workers and businesses, including:
 
Relief checks. If you earn less than $75,000, and file taxes singly, you can expect a one-time payment of $1,200. If you're married, you and your spouse will each receive a check. Children will receive $500 each. Social Security benefit recipients will receive checks, too.
 
Higher unemployment benefits. CARES raised unemployment benefits by $600 a week for four months.
 
Tax credits for businesses that keep paying employees. Businesses of all sizes are eligible for a tax credit intended to keep workers on the payroll. The credit is up "to 50 percent of payroll on the first $10,000 of compensation, including health benefits, for each employee," reported NPR.
 
U.S. stock markets rallied on the news. Some speculated the shortest bear market in history had ended, but Randall Forsyth of Barron's cautioned, "To anybody who has been around for a market cycle or more, that pop was the very essence of a bear-market rally, and such rallies are the most violent."
 
Major U.S. indices moved higher during the week.
 

Data as of 3/27/20
 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 10.3% -21.3% -9.4% 2.8% 4.3% 8.0%
Dow Jones Global ex-U.S. 9.5 -24.8 -18.5 -4.9 -3.2 -0.2
10-year Treasury Note (Yield Only) 0.8 NA 2.4 2.4 2.0 3.0
Gold (per ounce) 8.2 6.2 23.5 8.8 6.2 3.9
Bloomberg Commodity Index 2.6 -22.5 -23.1 -9.4 -8.8 -7.2
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
 
Practical advice for handling packages and groceries. The Washington Post published an article written by Joseph G. Allen, an assistant professor of exposure and assessment science at Harvard's School of Public Health. Allen explained precautions to take to prevent disease transfer from packages and groceries. (Yes, coronavirus can live on a surface, but the risk of disease transmission is low.)
 
Here are some of Allen's suggestions for handling delivery packages:
 
  • Leave packages outside or bring them inside and leave them by the door for several hours.
  • Wipe down package exteriors with disinfectant.
  • Unwrap packages and leave the packaging in the recycling can.
  • Wash your hands after touching a package.
 
Allen also offered suggestions for grocery shopping:
 
  • Stay six feet from other shoppers.
  • Don't touch your face while shopping.
  • Put your groceries away.
  • Wipe anything you are using immediately with disinfectant. (Clean all grocery packages before you put them away, if it makes you more comfortable.)
  • Wash your hands after putting groceries away.
  • Wash fruits and vegetables before using.
 
So, how many hours is enough hours to wait? Allen explained the findings of an article in the New England Journal of Medicine. "...the virus's half-life on stainless steel and plastic was 5.6 hours and 6.8 hours, respectively. (Half-life is how long it takes the viral concentration to decrease by half, then half of that half, and so on until it's gone.)"
 
Finding humor in a time of stress. In Time's article, 'Laughter Helps the Brain Relax. How Humor Can Combat Coronavirus Anxiety,' William Kole offered some insights to the importance of humor:
 
"Neil Diamond posts a fireside rendition of 'Sweet Caroline' with its familiar lyrics tweaked to say, 'Hands ... washing hands.' A news anchor asks when social distancing will end because 'my husband keeps trying to get into the house.' And, a sign outside a neighborhood church reads: 'Had not planned on giving up quite this much for Lent.' Are we allowed to chuckle yet? We'd better, psychologists and humorists say. Laughter can be the best medicine, they argue, so long as it's within the bounds of good taste."
 
When you're feeling overwhelmed, it can help to spend some time with the work of your favorite comedian, satirist, or cartoonist.
 
Weekly Focus - Think About It
 
"Apparently there is nothing that cannot happen today."
--Mark Twain, Humorist
 
Best regards,
Lee Barczak
President
 
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. *Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * The Standard & Poor's 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision.
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