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The Best of What They Said and I Read Week Ending 5/3/2020

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice

  Barron’s – May 1, 2020 – The Great Disconnect:  Stocks and Just About Everything Else – Randall W. Forsyth

  • “To say that these are the best of times and the worst of times is a gross understatement. The U.S. economy is in a free-fall as a result of the coronavirus outbreak, while the stock market just finished its best month in years…April, which was the best month since January 1987 for the Dow Jones Industrial Average and S&P 500 index. They gained 11.08% and 12.68%, respectively, while the technology-led Nasdaq Composite jumped 15.45%, its best showing since June 2000.   Even more spectacularly, the Dow, S&P, and Nasdaq were all up roughly 30% from their lows hit on March 23.”
  •  “…The massive discrepancy between the behavior of the economy and the stock market is the conundrum that Brown Brothers Harriman’s chief strategist, Scott Clemons, says his clients ask about the most. Part of the strength in equities might be traced to the markets seeing better days ahead…Clemons says to watch what happens in the next couple of weeks in Georgia, South Carolina, and Tennessee, states with the most aggressive reopening plans. If an upswing in coronavirus cases occurs, restrictions might need to be reimposed.”
  •  “…More than anything, credit for the rebound in the stock market goes to the Federal Reserve, in conjunction with the federal government, which have combined for the most aggressive monetary and fiscal stimulus programs seen in peacetime.”

 U. S. Global Investors – May 1, 2020 – Frank Holmes

  • “…The major market indices finished mostly down this week. The Dow Jones Industrial Average lost 0.22 percent. The S&P 500 Stock Index fell 0.21 percent, while the Nasdaq Composite fell 0.34 percent. The Russell 2000 small capitalization index gained 2.22 percent this week…The 10-year Treasury bond yield rose 1 basis point to 0.614 percent.”
  •  “Gross domestic product fell 4.8 percent in the first quarter…This marked the first negative GDP reading since the 1.1 percent decline in the first quarter of 2014 and the lowest level since the 8.4 percent plunge in Q4 of 2008.  Consumer confidence plunged in April as millions lost their jobs and there was an unprecedented deterioration of an index that monitors their attitudes about current business and work conditions. The Conference Board said Tuesday that its confidence index tumbled to a reading of 86.9, the lowest level in nearly six years and down from 118.8 in March.”
  •  “…The U.S. is facing a meat shortage as nearly a million fewer cattle, hogs and sheep were processed in the last week than were the same time a year ago. Meatpacking facilities have seen a large number of coronavirus infections with at least 4,400 workers ill across 80 plants. Shoppers will likely see less meat on grocery store shelves until processing capacity is back to normal levels. With plants closed, farmers have had to put down animals. President Trump signed an executive order this week aiming to keep meat processing plants open.”
  •  “…A new challenge has emerged for the aviation industry: what to do with thousands of grounded jets. According to Cirium, more than 16,000 passenger jets – or 62 percent of the world’s planes – are grounded due to the coronavirus. Bloomberg reports that aircraft still need attention while in storage such as maintenance of hydraulics, protection against insects and wildlife and keeping humidity from corroding parts. Anand Bhaskar, CEO of Air Works, says “Parking space is a problem. These are logistics nightmares which we’re trying to work around.”

 Kiplinger Personal Finance Adviser – May, 2020 

  • “…With some states slowly opening their economies back up while others extend shelter-in-place orders, you may have lots of free time on your hands even if you’re working from home.  Now’s the time to get your finances in shape.  Best of all:  These projects cost nothing.  If you haven’t reviewed your credit reports lately, visit www.annualcreditreport.com, where you can get a free credit report from each major credit bureau – Equifax, Experian and TransUnion.  Ordinarily, you can only get a new report from each bureau every 12 months, but through April 2021, you can get a report once a week.   Look for suspicious changes, such as a credit card account or mailing address that you don’t recognize, which could mean you’ve been the victim of identity theft.”
  •  “Next, create an online account with Social Security at www.ssa.gov/myaccount, even if retirement is years away.  Doing so will prevent anyone from creating a fraudulent account in your name.  You also can check your earnings history to make sure there are no gaps in your record that could reduce your benefits.”


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