May 1, 2020 Lesjak Planning Perspective
Since our last communication in March which touched on the potential impact of positive news on equity markets, the U.S. financial markets have staged a dramatic recovery coinciding with the gradual positive developments on the coronavirus and economic fronts. Although there is still a considerable amount of ground to make up to reach the previous market highs of February, tremendous progress has been made since the March lows. During our forty years in business, we have never witnessed a period of extreme volatility such as this. The following chart and accompanying statistics put the decline and ensuing recovery into perspective.
Year End Thoughts
Economic decline caused by lockdowns due to the Covid-19 virus is being confronted on a number of fronts. Congress has recently agreed on another stimulus bill that will help individuals and businesses to the tune of $900 billion.
The Federal Reserve is also optimistic and in a recent meeting said that the economy has potential for strong growth in the latter part of 2021. The Fed left interest rates unchanged at their current low rates and stated it remains committed to doing whatever it can to ensure a strong recovery.
Second Harvest Growing Hope Campaign
As we enter the Christmas holiday season we give thanks for the client relationships made over the years and appreciate both your business and friendship.
We have always prioritized the wellbeing of our clients. This year during the COVID Pandemic is no different. After much thought, and out of concern for the health and safety of our clients, we have decided to forego our Annual Holiday Champagne Brunch for this year.
August 20, 2014 Perspective
In the two week period from July 23rd through August 7th, the Dow Industrials and S & P 500 declined about 4.5%. Headlines touted this as the beginning of the next major decline from the current record highs. Novice investors headed for the exits selling not only equities, but also high yield (Junk) bonds. It seemed as though the rout was on.
Times – They are A-Changing
It boggles the mind how so much has happened in such a short period of a couple of months. From the start of a rather benign year in which the U.S. economy was continuing to chug along and unemployment at its lowest levels in decades came the multiple slaps of the Covid-19 virus, a worldwide oil price collapse, economic shutdown, protests against police and volatile riots and looting shops and stores across the nation. Divisions on multiple subjects have split the population in historic number. Hopefully, cooler heads will prevail on both extremes and we can come together as a nation in a peaceful manner.
April 1, 2020 CARES Act Update
The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 was signed into law by President Trump on Friday, March 27th after several days of tense negotiations within Congress. The Act is an estimated $2 trillion package including nearly $500B in individual rebate checks, another $500B for support of several severely damaged industries, nearly $400B support including tax credits for wages and payroll tax relief, over $300B of support for state and local governments, and almost $150B for various initiatives to support hospitals and the health care system. Below is a summary of provisions we felt most relevant to you.
March 24, 2020 Positive Note
On a positive note it appears that the day to day selling is getting less severe as bargain hunting buyers are starting to make an entrance, according to the underlying indicators. The deaths in China appear to be in dramatic decline and in Japan and South Korea they have actually resumed practice baseball games. Stores and restaurants are also returning to normal in China including big names such as Apple, IKEA, and Starbucks.
Lesjak Planning Offices Remain Open
This past Sunday, Ohio Governor Mike Dewine instituted a “Stay at Home” order requiring all non-essential workplaces to cease operations as of 11:59pm tonight. Lesjak Planning offices, deemed an essential workplace by the order, will remain open to address your ongoing service needs while also maintaining our daily operations. Our ongoing monitoring and review of your portfolios, investment markets and money managers will continue as well.
March 17, 2020 Current Thoughts
The U.S. Government, along with other governments around the world, is taking unprecedented steps in hopes of containing the Coronavirus and its impact on our society. Social distancing strategies are effectively grinding the economy to a halt as individuals and families forego most discretionary spending and businesses adjust to altered workforces.
March 12, 2020 Maintaining Perspective
Since World War II, there have been 11 U.S. economic recessions, 12 Bear Markets, and 23 U.S. equity market corrections of at least 10 percent. The catalyst for these declines includes geopolitical events, terrorist attacks, credit market collapses, and various asset bubbles, among others. The underlying cause of a significant decline in economic activity or equity market prices changes throughout history, but the stages we experience through those declines remains the same. As we have mentioned often in past commentaries, Uncertainty for the equity markets leads to Fear, which ultimately results in significant short-term volatility and temporary price declines. These events are, in part, exacerbated by the relentless barrage of media sensationalism.