We hope this finds you safe and faring well. Here's a look at this week's highlights:
View a more detailed summary of the week's events in the linked article below.
Uncertainty about the economic recovery is restraining business optimism and hiring gains. Initial unemployment claims ticked up slightly last week to 870,000 from 866,000 the week prior. Many of the layoffs and closures which we all hoped would be temporary are becoming permanent losses as the government aid to keep workers on payroll and businesses open is running dry. Exacerbating the uncertainty was Congress' shifting focus: away from a bipartisan relief package and toward the hyper-partisan battle to replace Supreme Court Justice Ruth Bader Ginsberg.
As the COVID-19 pandemic rolls into its ninth month here in the U.S., one of the challenges that has become apparent is the temporal aspect of human psychology. Early in the episode, our elected officials and policy makers locked arms, rallying both resources and public sentiment. C-19 has proved to be a persistent and challenging foe, however, and not the singular shock many thought it would be. As it turns out, C-19 has induced a multi-shock sequence for which we are not well-suited: consumer fatigue, ebbing political leadership and the subjugation of science to various causes makes successive rounds of support increasingly difficult.
From an investment perspective, we observe that the liquidity infusion which has bolstered stock prices is weakening. The fiscal anchor from Congress (new / extended support programs) is absent. And the economic bedrock of underlying strength, reflected in sturdy corporate financial metrics, is also missing. So that means stock prices are set up for an extremely volatile fourth quarter and election cycle.
We continue to monitor these and many other factors on your behalf. Regardless of how disconcerting the news flow is, however, we stand ready to answer any questions you may have or to meet with you to review your portfolio and financial plan. Please don't hesitate to reach out, and thank you for the confidence you have placed in us.
FMA ADVISORY, INC.