Market and Economic Commentary

2nd Quarter 2020
Summary: Overview

• In the second quarter of 2020, the market reflected historic volatility, declines, and investor fear.  Generally, getting or keeping exposure to the equity market over such timeframes, though nerve-racking in the short-to-intermediate term, has worked out more favorably over the long term.

• The U.S. economy was doing well prior to the unprecedented, near total shutdown ushered in by the Coronavirus.  It remains to be seen if, when, and for how long personal and professional habits may change.  Recent indications suggest that people are traveling and spending in areas that have reopened.

• Some economists predict a “V” shaped recovery, while others have talked about a “U” or “L” shared recovery (or lack thereof).  Various policy responses and stimulus packages that have been enacted or are being proposed by the government will certainly help.  Ultimately, however, health concerns and restrictions need to dissipate such that supply chains are restored, businesses – both large and small – reopen, and people resume some semblance of normal activity (working and spending).

• Billions of dollars left the markets between March and June.  With interest rates in the U.S. and around much of the world around 0%, those funds will eventually seek a home elsewhere.