2020 "Halftime" Market Report

2020 “Halftime” Market Report

Hey Folks,

Here we are, beginning the second half of 2020. To date, it has been a remarkable year. (That’s probably quite an understatement.)

What follows is a partial list of the challenges we have faced so far in the year 2020: the Coronavirus pandemic, business closures, an election year, civil unrest, Presidential impeachment proceedings, a trade war with China, a new North American trade deal, large financial market declines, entry into a Bear market, large financial advances, and emergence from a Bear market, resumption of an ongoing Bull market, and a media “machine” that has extended beyond the bounds of journalism, into entertainment, and seems to shine light on whatever will produce the highest ratings.

We are now in July of 2020. If we look at investing like we would look at an athletic contest, it is now Halftime.

At Halftime, coaches typically gather their players to analyze what happened in the first half, and make adjustments to keep doing what went right, and adjust things that didn’t go as well. The goal is to improve our team, to perform better in the second half, and perhaps inspire the team to change its perspective from being tired and discouraged to being energized and seeking opportunities, with a rousing Halftime message.

So, here we go! If you have kept up with the messages that we have been sending out since the beginning of the year, you are aware that we remain bullish over the long term, while remaining somewhat cautious about severe market swings in the short term. In the first quarter of this year, the economy began an abrupt stop. It was similar to stopping a train, moving at high speed. Some of the cars left the tracks, while others remained in place.

Most business, political, and community leaders have been working hard to get the “derailed cars” back on the tracks, while some are standing to the side, hoping to delay getting some of the cars back onto the tracks, because the longer the cars stay off of the tracks, the better it is for them, because they can exert control over the derailed cars. It is much harder to control a car moving at high speed.

Fortunately, Americans are resilient and willing to work to get things back on track. So, we have seen folks put pressure on leaders to return to a “more normal” state, while remaining attentive to the issues surrounding a return to normalcy.

Many of us have changed some of our behaviors to remain safe and protect the safety of others. Examples of this are things like masks being worn by many when in the company of others, and engaging in more advanced planning for everyday types of activities, such as grocery shopping. We are seeing quite a bit of online purchasing taking place, and trips have been condensed. Rather than running to the store anytime we need something, our shopping lists have become longer and we take the trips less often.

Strictly speaking of the financial markets, it appears that earnings in the third and fourth quarters of this year will be much stronger than the first and second quarters that we have recently experienced.

The markets have rebounded from their lows much more quickly than I initially anticipated, which is good, but it also has me watching for additional volatility.

So, “Let’s keep our eye on the ball”, “Keep playing until the whistle blows”, “We are all in this together”, and “If we get knocked down, get up and keep moving forward”!!

We are here for you. Our focus is on working toward the long term success of our clients.

You have friends that are out there, hoping that things will work out for them, rather than taking action. Talk to them and let them know that if they would benefit from the things that we do, that we are open to providing whatever assistance they may need. Your friends are typically our friends.

We wish you all the best, and hope that you remain healthy, happy, and strong. We look forward to scheduling our first gathering as soon as our community emerges from the current shutdown.

Sincerely,

Darryl G. Barnes, President

Deacon Wealth Management, LLC.