The painfully obvious news is that the coronavirus (COVID-19) has continued to spread across the United States and much of the world last week. Much of the increase in the U.S. numbers can be attributed to more testing, resulting in finding more people who have been exposed. However, according to the raw data provided by websites from the Center for Disease Control (CDC), the overall mortality rate in the U.S. from the disease continues to hover somewhere between 1.2%-1.3%. While this mortality rate is still lower than what was initially feared, it is still higher than the common flu, which kills tens of thousands in the U.S. alone each year. The fact that this strain of virus is new, and that we do not yet have a known cure or vaccine to prevent it, is causing much of the concern in the markets. However, there is also a lot of unnecessary drama and fear mongering on TV news that is making this MUCH worse than it should be. While it is common sense to want to protect what you have built, and we all have a natural instinct to want to pull something we value out of danger, the script writers for the daytime and evening news cycles are playing on those instincts and, as a result, are irresponsibly creating and working to increase the intensity of our fears in order to garner advertising dollars. Please just do your jobs and tell us what is important, and why - and without all the intense hyperbole and drama. Thank you.
As of Monday, March 23, there were more than 46,000 virus cases identified in the U.S., with a large percentage of those in New York, Washington State and California. At the time of this writing (Tuesday, March 24), the number of deaths attributed to this virus in the U.S. is 593. By contrast, according to the Bureau of Transportation Statistics, https://www.bts.gov/content/motor-vehicle-safety-data, deaths by automobile accidents account for an approximate average of over 36,000 (approximately 100 per day) people of all ages are killed in automobile accidents each year, just in the U.S.; and death by suicide in 2019 in the U.S. totaled more than 47,000. This, by no means is an effort to dismiss the potential physical, psychological and economic effects of this virus, and the efforts to contain and mitigate the growth of the virus are definitely real. Several states – including California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Louisiana, Maine, Michigan, New Jersey, New York, and now Wisconsin and Indiana – have issued various shelter-in-place orders that apply to the entire state or one or more counties within the state. The intent is to enforce social distancing and slow the spread of COVID-19, reported Wired. This is new to us, and it is fear of the unknown (and the visual evidence in other countries of what it can do to a nation if left unchecked), which has many people worried about how long this will last, and how long our medical and economic infrastructure (as well as our personal bank and retirement accounts) can endure this. Yes, we will endure it, and we will be a better and stronger nation for it.
Mandates varied by region. Many included closing non-essential businesses and required residents to stay home unless they were buying groceries or gasoline, filling prescriptions, seeking medical care, or exercising outdoors (while practicing social distancing). The shape of many Americans’ daily lives has changed significantly. Last week, Barron’s reported initial claims for unemployment benefits in the United States increased sharply, while U.S. manufacturing productivity dropped significantly. The impact of measures taken to fight the spread of COVID-19 on companies, financial markets, and the economy is difficult to quantify at this point. However, there is reason to hope it will be relatively brief. The Economist reported:
“Despite stomach-churning declines in GDP [gross domestic product, which is the value of goods and services produced in a nation or region] in the first half of this year, and especially the second quarter, most forecasters assume that the situation will return to normal in the second half of the year, with growth accelerating in 2021 as people make up for lost time.”
Monetary stimulus will have a significant impact on outcomes around the globe. Central banks have been implementing supportive monetary policies. Last week, the Federal Reserve lowered its benchmark rate to near zero, announced a new round of quantitative easing, and took additional steps to inject liquidity into markets.
Fiscal stimulus – the measures implemented by governments – will also be critical. To date, the United States has passed two stimulus measures. The first provided $8.3 billion in emergency funding for federal agencies to fight COVID-19. The second is estimated to deliver about $100 billion for testing, paid family and sick leave (two weeks), funds for Medicaid and food security programs, and increases in unemployment benefits. The third stimulus is currently being negotiated in Congress and may provide more than $1 trillion dollars in relief to individuals and companies, reported Axios. On Sunday, Reuters reported the Senate planned to vote on the bill on Monday, March 23, 2020.
Major U.S. stock indices finished last week lower, reported CNBC.
We hope you and your family are well and remain so. Please take the precautions advised by your city, state, and federal governments to limit the advance of COVID-19.
Financial Help During COVID-19 Crisis. The temporary closing of non-essential businesses, shelter-in-place orders, and other changes that have come with efforts to keep COVID-19 from overwhelming hospital and healthcare facilities are creating economic challenges for many families. Here are four support and stimulus measures that may help.
Customers must contact their banks to request support.
Go to Kiplinger.com to see if any other assistance may apply to you.
Guidance Wealth, LLC - Indiana’s Non-Essential Business Shutdown
The State of Indiana has issued a temporary shutdown of non-essential businesses and activities that extends from midnight, Tuesday March 24, for the remainder of two weeks – or until Monday April 6th. Our business has been deemed “Essential”, and we will remain open for business. However, we also feel it is safer for our clients, and for all concerned to continue providing our services via phone and/or email, thereby limiting travel and unnecessary potential exposure for everyone. We can continue this indefinitely, and our office is large enough to provide substantial social distancing. We also have an extraordinarily clean office right now. However, if it becomes absolutely necessary, we can also provide the vast majority of our client services remotely.
Weekly Focus – “Be Calm. Be Vigilant. We are Strong. We are Americans. We will get through this together, and be even stronger as a nation for having done so…Together.”
-- Guidance Wealth, LLC
Advisory services offered through Guidance Investment Advisors, LLC, doing business as
Guidance Wealth, LLC, a registered investment adviser registered with the Securities and Exchange Commission. SEC Registration does not imply any level of skill or training.
* These views are those of Carson Coaching, and not the presenting Investment Adviser Representative or the Representative’s Registered Investment Adviser, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named registered investment adviser.
* Weekly Market Commentaries are sent as mass email communications by the designated email address firstname.lastname@example.org.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/03-23-20_CDC-COVID-19_Cases_in_United_States-Footnote_1.pdf)
https://www.barrons.com/articles/washington-must-go-all-in-now-on-fiscal-aid-or-america-will-pay-later-51584746071?refsec=economy-and-policy (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/03-23-20_Barrons-What_Washington_Needs_to_Do_Right_Now_to_Spare_America_a_Second_Great_Depression-Footnote_3.pdf)
https://www.economist.com/briefing/2020/03/19/governments-are-spending-big-to-keep-the-world-economy-from-getting-dangerously-sick (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/03-23-20_TheEconomist-Governments_are_Spending_Big_to_Keep_the_World_Economy_from_Getting_Dangerously_Sick-Footnote_4.pdf)