The solution to prevent the spread of the virus, provided by medical experts, was that the entire U.S. population should shelter in place at home. According to statistics, that policy was successful, and we were able to keep our hospitals and medical staff from being overwhelmed. However, during this same time, the strongest U.S. economy in history was completely shut down for 4 months.
Because the effect of the Covid-19 virus was very different from state to state, It was left to the governors of the individual states to decide how quickly to open up their economies. As the states moved ahead to phase 1 of opening up the state economies, there was great trepidation regarding the risk of a new Covid-19 outbreak. We have all been watching each state with great interest as they open up businesses with new safety measures.
At this very fragile moment, a horrible event occurred in Minneapolis, Minnesota. We all were shocked at the video showing a white policeman putting his knee on the neck of a young black man until he died from suffocation. There was almost universal agreement that the officer should be held accountable to the fullest extent of the law. Many felt led to protest about the injustice they saw. Unfortunately, as the peaceful protests began to spread across the country from city to city, some people have taken advantage of the protests to loot and burn cars and small businesses, and sometimes kill innocent people. When we add the volatile political environment of a nearing presidential election, this situation dominates the news cycle. Just like all citizens, we pray our country will find a way to come together, work through this tragedy, and make our country stronger.
During all of this chaos, it is easy to get distracted from the stock market and economy. At Financial Professionals, Inc. we realize it is our job to focus on the economy and markets for our investors. As the coach told us when we played little league baseball, “Keep your eye on the ball and don’t get distracted.” We just want to let you know that while all of these things have been going on, we have seen substantial improvement in the economy and financial markets.
- On 1-15-2020 the Dow Jones Industrial Avg. sat at 29,348, a historical all-time high.
On 3-23-2020 the Dow had dropped to 18,591.
On 6-30-2020 the Dow had risen back to 25,812.
- The unemployment rate in April was 14.7%. In May the unemployment rate dropped to 13.3%.
In May 25 million people received jobless benefits. By June 13th that number dropped to 19.5 million.
It appears that this was due to phase one of the states re-opening their economies.
- On 6-9-2020 the following headline was in the Business and Finance section of the Wall Street Journal: NASDAQ SURGES TO RECORD LEVEL, S&P TURNS POSITIVE FOR YEAR.
There is plenty of reason to believe that our great country will weather all of these difficulties and emerge stronger than ever before.
Sources: Wall Street Journal