Our previous newsletter introduced the term, ‘COVID Reactionary Market’. That is, the likelihood that news on the virus would influence near-term market returns: positive news will spur gains while negative news would drive losses. Last week seemed to prove that theory.
Reports of a surge in new coronavirus cases throughout the nation, including a single day, all-time high of 40,000, pushed markets down an average of 2-3% for the week. This surge in new cases calls into question whether states will be able to continue to open up their economies. That uncertainty may weigh on the markets in the near term.
Despite this negative news, there were some positive developments to report, including:
*May consumer spending rose a record 8.2%, a sign that the U.S. economy is growing again.
*Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said it’s possible to have a viable COVID-19 vaccine within a year of the coronavirus first coming to the attention of the U.S. government.
Above all, the markets hate uncertainty. Time will continue to provide clarity to the current situation and we believe that we will see optimism return to the markets.
As always, we are here to answer your questions and address your concerns. Please don’t hesitate to reach out.