Market Brief April 13 2020

Market Brief April 13 2020

Looking for a job? So are the other 17 million that have lost their jobs in the last 3 weeks. COVID-19 confirmed cases passed 1.7 million, with almost 30% in the United States. And $62 billion was pulled from equity funds last week. Not to mention consumer sentiment fell to a 9 year low. So how did the markets finish the week before Easter? How about the best week since 1974! The Dow, S&P, and Nasdaq indexes all finished up last week. Dow up 12.7%, S&P 12.1%, and Nasdaq 10.6%.

The markets seem positive that the end is near. Stocks rally last week was mainly driven by the Federal Reserve action. Pumping $2.3 trillion in additional lending programs. The S&P 500 recorded the best week since October 1974. Why would the markets go up with all the bad news? Markets are forward looking. Pricing in all the information and looking through the mud ahead. Economist estimates for the second quarter are all over the board. All agree Q2 is in the tank. Q3 is where the predictions become less clear. Some believe a continued slowdown, while others expect a massive recovery. Hard to grasp to say the least.

The Week Ahead

Following updated COVID-19 updates will be oil and corporate earnings headlining the week. All economic data is basically factored in and the attention moves to the individual companies performance and expectation. How bad was Q1? What will happen in Q2? What changes were made to adjust to quarantine life? When can employees work full-time again? Bank reporting is heavy this week, led by JP Morgan, Wells Fargo, and Bank of America.

Unemployment numbers on Thursday will be watched closely. Two other economic reports worth noting are the Retail Sales on Wednesday and U.S. Building Permits on Thursday. These report will be for the month of March. Both expected to be ugly. Year-to-date index performance; Dow down 16.9%, S&P down 13.6%, and Nasdaq down 9.1%.

Have a safe week!

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This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief March 30 2020

Tiger King Market Update

Yes, Tiger King fans, this post is for you. Since the Tiger King rage went viral last week, the market has also hit record setting performance days! Is it safe to say Joe Exotic should be the next Fed Chairman? It’s not a bear market, not a bull market, but a Tiger market! I’m all in … to the show, not stocks…

OK, time to get serious. Market dip to market rip! The Dow soared by 21% over a 3-day span, closing up 12.77% for the week. The largest 3-day gain since October 8, 1931, during the Great Depression. The Dow’s weekly finish was the best weekly gain since 1938, despite losing 4% on Friday. The S&P and Nasdaq indexes also finished up for the week, 10.26% and 9.05%, respectively. The indexes ignored the record weekly unemployment claims of 3.28 million! A record setting number in it’s own right. The U.S. also passed China last week with the number of virus infection cases. The saving grace for markets last week was the announced $2.2 trillion relief plan.

Despite the market bounce that began last Tuesday and continued today, large and fast rallies are frequent characteristics of longer-term bearish periods in the market. The eventual recovery from this public health crisis will be gradual, similar to the financial crisis recovery. The recovery is still unknown, and according to Dr. Anthony Fauci, “the virus makes the timeline,” and that will probably determine the markets recovery as well.

The Bailout

Stimulus, bailout, virus relief, The CARES act, whatever you want to call, came to the rescue at the end of last week. The fiscal policy pumps trillions into the economy, aimed at providing liquidity to households and businesses. These include IRS checks, a major expansion in unemployment benefits, as well as a broad combination of grants, loans, and loan guarantees for businesses (large and small), hospitals, schools, and state and local governments. This stimulus is designed to buffer the economy in the short-term, as the virus hit the hard and fast across the country. Long-term the effects may linger for some time. The upcoming quarterly earnings season will provide investors better guidance on how hard companies have been hit.

The Week Ahead

Policymakers’ huge support has helped stabilize risk, but long-term market stability and declining volatility hinges on the apex of coronavirus infections being in the rear-view mirror. Economic reports for the week include a slew of data including manufacturing and employment. This week’s focus will be on the jobless claims number, showing a more clear picture of the economic state.

Year-to-date index performance; Dow down 24.2%, S&P down 20.96%, and Nasdaq down 16.4%. Volatility remains high and historically market rallies come back after volatility drops to normal range.

Have a safe week and remember to go for a walk outside (after finishing the Tiger King season on Netflix)!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief March 23 2020

Market Brief March 23 2020

Last week was the worst week the stock markets have seen since 2008. Continued developments of the coronavirus dominated the news, as the number of cases in the U.S. surpassed 15,000. This news left the indexes in a downward free fall. The three major indexes all finished down between 14-17% for the week ending March 20. The increase in cases is also getting the attention of life insurance, as I wrote about last week and you can read it here. Forget gold and oil as great market hedges, the future is now in toilet paper and hand sanitizer! (Just kidding).

To no surprise, economic data last week disappointed. China sales and industrial production was down double digits compared to last year. German economic sentiment also fell to the lowest on record. The lone bright spot from last week, was U.S. sales. For the month of February, U.S. retail sales came in 4.35% higher compared to last year. New home sales dropped for the month, while existing home sales jumped 6.5%. The existing home sales grew to the highest level since 2007, proving the real estate market was on solid ground prior to the virus outbreak.

The Week Ahead

The week ahead will be focused on stimulus news in the U.S., as well as, the flattening of the coronavirus infection curve. Wednesday’s durable goods order report is expected to be positive. However, this could be the last positive report we see for awhile, as business and productivity slows during the state ordered or self-mandated quarantine phases. Thursday’s unemployment claim report will likely soar, as businesses cut staff and hours for workers.

Big Picture and Recovery

Year-to-date index performance; Dow down 32.81%, S&P down 28.66%, and Nasdaq down 23.3%. According to Wilshire, this is approximately $12 trillion of wealth that has evaporated. Due to the recent domestic productivity halt, most banks have cut 2nd Quarter growth outlooks significantly. Goldman Sachs has revised their 2nd Quarter outlook to -24%, while J.P. Morgan cut their outlook to -14%.

The consensus for recovery is based on three outcomes. First, how quickly will the virus be contained. Second, whether businesses will have access to enough liquidity, or capital, over the next 90-180 days. And lastly, whether the fiscal stimulus can stabilize growth forecasts. Until then, volatility looks to remain high and sensitive to the latest news stemming from the virus developments and economic impacts.

Keep your distance, share the TP, and continue to wash your hands this week!

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Coronavirus and Panic for Life Insurance

Life insurance and the panic for life insurance

The events of the last two months have brought plenty of craze to the insurance world, specifically life insurance. I am using this post to outline and provide clarity around life insurance planning during this time time of a virus outbreak.

People are looking for life insurance due to the coronavirus.
Should people panic and buy life insurance?

The best practice for whether to buy insurance depends on your individual needs. Despite coronavirus, you either need a policy to protect family, business, estate, etc., or you do not. The coronavirus certainly can cause you to think about your plan, as there is no cure at the moment, which draws concern to folks without a plan in place. However, the virus is no different from any other health scare or accident – cancer, heart attack, car crash – all these events will prompt you to rethink your plan and get coverage in place.

Follow this link to learn more about the different types of life insurance.

What should people know and look for that are interested in
buying a policy right away due to the pandemic?
 

Complete an application while you are healthy. If you wait and contract illness, the insurance companies will review your medical records and may have hesitation to approve your policy at the preferred rating. Worse yet, hospitalization or death could seriously impact your chances of an approved policy.

Are there any exclusions people should be aware of? 

If you are healthy and need coverage get it. Do not wait. The younger and healthier you are, the more favorable the cost. It is uncertain how the underwriters at the insurance companies will consider an illness, such as the coronavirus, when reviewing insurance applications. 

What could keep someone from being able to get a life
insurance immediately?
How long should they expect it to take
for the policy to start?

Insurance policies are largely based on your health and age. If you are old and have poor medical history, chances of getting a policy approved would be difficult. Previous medical history with life threatening illnesses, such as cancer, can also impact your ability to obtain coverage. Having bad habits, such as using tobacco, or a bad driving record, such as multiple DUI’s, also impact your ability to get an approved policy at the best rate. Policies can start at the time of application with what is referred to as “Temporary Life Insurance Coverage”. This coverage begins at the time of application, so the applicant has coverage while waiting for the full underwriting process to be complete. Applications can take a week to as long as a couple of months, depending on the applicant’s medical and lifestyle background. Also worth noting, if the applicant has recently traveled abroad to the virus hotspots, this too could cause a postponed application. Ultimately, the insurance companies are looking at the applicant and asking the question, how big of a risk is this person?

Click here if you would like to learn more about your life insurance options and planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.