Weekly Market Commentary

June 9, 2020

 

The Markets

The employment report electrified U.S. stock markets last week.

American stock markets responded enthusiastically to the news U.S. unemployment was 13.3 percent in May. If it seems inexplicable double-digit unemployment would thrill investors, there is a reason. The unemployment rate in April was higher at 14.7 percent. All in all, that makes 13.3 percent look pretty attractive.

The improvement in unemployment reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it. The biggest job gains were in leisure and hospitality, construction, education and health services, and retail trade.

The investment approach I have been taking with your portfolio was defense when the virus came in hard followed by a preservation model to give us time to monitor the economy. I have followed the data and the opening of our various states and have been increasing equity back into the portfolios on a higher level. I have mirrored the approach of the reopening and the success of the rollout. It is working very well and the outlook at this time appears positive. Please reach out to me if you have any questions or concerns about this approach. So far, I am pleased and happy to report I have not heard of any of our clients being infected or being ill from the virus. Good work everybody. This will end so stay patient and ride it out. Also enjoy the lack of traffic while you can!

Necessity is the mother of invention. The silver lining of the COVID-19 cloud may be innovation. From healthcare to retail, people and companies have been identifying problems and finding ways to solve them:

  • How much toilet paper is enough toilet paper? As consumers cleared shelves of toilet paper, a company in Germany developed a toilet paper calculator to help determine how much is enough. “A person with a stockpile of 10 rolls, who uses the typical amount of paper three times a day, should survive for 53 days…39 days longer than the recommended 14-day quarantine for those with symptoms,” reported Reuters.
  • Ingenious respirator solutions. Early in the crisis a dearth of respirators handicapped healthcare workers’ ability to support patients with serious cases of COVID-19. Many companies developed alternatives. One company, “…built a simple but effective ventilator from a windshield wiper motor and a pliable [hand-operated resuscitator],” reported Eric Haseltine in Psychology Today.
  • Where’s Waldo’s fever? An artificial intelligence firm that creates tools to detect threats of violence revamped its analytics software so thermal cameras can measure the temperature of a person’s forehead and send out an alarm when a fever is detected.
  • Gear ‘Q’ would have loved. A California company held a month-long contest, asking participants to suggest practical devices for a COVID-19 world. Entries “…poured in, including a wrist-mounted disinfectant sprayer, half gloves for knuckle-pushing of buttons and a device that lets you open car doors without touching the handle, aimed at cab users,” reported Reuters.

Focus On The Positive

“Give peace a chance”  -John Lennon

Best regards,

Bill Spalding