Markets stayed flat for most of the day yesterday before turning down slightly near the end of the day. Overall, 8 of 11 S&P sectors were down for the day. Gold continued to rise while silver took paused for the day.

On the COVID-19 front, new coronavirus cases could be leveling off. Daily new cases dropped below the 60,000 level, a good sign, and both Pfizer and Moderna are entering Phase 3 of vaccine development. Pfizer has said they believe vaccinations could be in high demand through 2022.

The NBER officially placed the U.S. economy in recession in June, but the website fivethirtyeight.com points out that most economic indicators ill-suited to measure the current state of the economy given the velocity of change. They suggest better indicators to watch are the weekly unemployment claims, continuing unemployment claims and oil demand – which is a proxy for consumption/activity.

Today’s Key Questions

- Which vehicle has seen a big increase in sales for 2020? Motorcycles or motorhomes?

- Which indicators show the direction the economy is headed?

- How much is savings would it take to make you feel comfortable?

Today’s Bible Verse – Job 23:10

But He knows the way that I take;

When He has tested me, I shall come forth as gold.

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Markets broke a two-day losing streak yesterday, rising very slightly, as both gold and silver continued to rise. It looks like we’re headed for a historically best rise for stocks, bonds and commodities as we near the end of July.

Yesterday was the release of the much-anticipated stimulus proposal from the GOP. At first glance, the package includes $1 trillion in overall spending. One headline is that the $600 stipend would be reduced to $200 per week through August and September, then there would be a shift to 70% income replacement starting in October. There’s some documented challenges with implementing the latter but they believe they have a viable strategy to do so.

We’re three months out of the election and the Democratic candidate Biden is currently ahead in several polls. Currently, it appears only 13% haven’t yet made up their mind on who to vote for – which means like most elections, the middle few will decide the victor.

FOMC meets today and Wednesday but don’t expect changes to rates but closely watching the language in notes released.

Today’s Key Questions

- How will the November elections impact policies and markets?

- What are the chances of a Democratic sweep in November?

- Which sectors stand to benefit from Democratic-leaning policies?

- How much “dry powder” does the Fed still have?

Today’s Bible Verse – Isaiah 40:28-29

Have you not known? Have you not heard?

The LORD is the everlasting God,

the Creator of the ends of the earth.

He does not faint or grow weary;

his understanding is unsearchable.

He gives power to the faint,

and to him who has no might he increases strength.

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Markets were down slightly last week, no big daily moves like we’ve seen earlier this summer. It appears the flight to safety has found its legs again. Gold-backed ETFs have seen more than $40 billion in inflows so far this year, roughly eight times more than experienced during the same time period in 2019. This week we’ll see tech giants Facebook, Amazon, Microsoft and Google (Alphabet) report second quarter earnings. Company earnings have been decent thus far but guidance for the second half of the year isn’t providing a real clear picture of the road ahead.

On the coronavirus front, cases continue to climb. New confirmed cases grew from 3 million to 4 million in just 15 days. The ongoing impact of the virus continues to retail sales which have slowed in recent weeks.

Today’s Key Questions

- How many Americans will lose their home to eviction?

- Will strength in the housing market continue to support the U.S. economy?

- Is Europe poised to outperform?

Today’s Bible Verse – 2 Corinthians 9:8

And God is able to make all grace abound to you, so that having all sufficiency[a] in all things at all times, you may abound in every good work.

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Markets were up again on Wednesday. Gold continued its rise, up 1.3% on the day and more than 3% for the week. Tesla reported first full year of profits in the history of the company, making it now eligible to become a member of the S&P 500 Index.

On the consumer front, existing home sales for June showed a 21% increase over May – the largest month-over-month gain since tracking began in 1968. However, the jump was coming off a very low level activity for earlier this year. With COVID-19 making a comeback in several states, office work is suffering. Three states where the outbreak has been most severe (Arizona, Texas and Florida), the number of in-office workers decreased by 5% from mid-June to mid-July.

The European Union passed an aggressive stimulus package earlier this week. The 27-country consortium authorized the borrowing of $750 million Euros to be distributed between 2021-2024. The relief will be financed by the sale of Euro bonds issued by the European commission and carrying a AAA rating.

The overarching goal is to stabilize economies across the region and limit the long-term impact of the coronavirus crisis on its economy.

Today’s Key Questions

- Are we too optimistic about a COVID-19 vaccine coming in 2020?

- When will the tide turn for weekly unemployment claims?

- Will the New York Yankees win World Series championship number 28 this year?

Today’s Bible Verse – Psalm 91:14-16

“Because he holds fast to me in love, I will deliver him;

I will protect him, because he knows my name.

When he calls to me, I will answer him;

I will be with him in trouble;

I will rescue him and honor him.

With long life I will satisfy him

and show him my salvation.”

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Equity markets closed roughly flat on Tuesday but two common commodities – oil and gold – returned to their early 2000s form. Oil prices reached highest level since March 2020 and gold soared to its highest price since 2011.

As additional Q2 data is released, it’s more rough news for consumer driven companies. United Airlines reported a $1.63 billion loss for the quarter, down from a $1 billion-plus profit a year ago. Open Table data for the month of June shows a 65-70% drop in restaurant reservations from June 2019.

On the unemployment front, major urban areas are being hit harder than rural ones. Cities like New York (+20% unemployment), Los Angeles (19.5%) and Chicago (16%) all outpace the national average of 11%. However, cities like Seattle (9%), Houston (9.9%) and Miami (11%) have fared better.

Today’s Key Questions

- How does low interest rates impact retirees?

- Anticipation for the MLB’s return is building, but does the spread of COVID come with it?

- How is Walmart, the nation’s largest employer, rewarding employees for their hard work?

Today’s Bible Verse – Psalm 91:9-11

Because you have made the LORD your dwelling place—

the Most High, who is my refuge—

no evil shall be allowed to befall you,

no plague come near your tent.

For he will command his angels concerning you

to guard you in all your ways.

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Big tech stocks had a massive day on Monday, generating $291 billion from growth in market value in just one day. Amazon jumped $117 billion in market cap, Tesla more than $26 billion and Microsoft added $67 billion.

Congress has returned to Capitol Hill and a new stimulus watch has begun. Democrats and Republican House and Senate members agree on the need for additional stimulus but have differing viewpoints on where the money should go and how it should be spent. Earlier stimulus programs passed in March have provided more than $15 billion a week in income to some 25 million Americans – these are set to expire at the end of July.

Across the pond, the European Union approved an $859 billion stimulus package on Tuesday – a mixture of grant and loan programs.

Today’s Key Questions

- How many American families are working just as hard, but earning less due to cutbacks?

- Does an up day for major indices mean an up day for all sectors?

- Will a coronavirus vaccine be available by the end of the year? Perhaps sooner?

Today’s Bible Verse – Psalm 91:2

I will say to the Lord, “My refuge and my fortress, my God, in whom I trust.”

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Last week was an anomaly for markets recently – value stocks outpaced growth stocks and big technology companies led the Nasdaq to underperform. Despite an incredibly eventful year, the S&P 500 is basically flat for 2020.

Some positive news on the consumer front. Thirty-year mortgage rates have fallen under 3% for the first time in history. June retail sales data has been released, showing a 7.5% increase versus the 5% gain that was expected. Consumer spending on gasoline jumped more than 15% as more people hit the road, and we also saw increases for auto, furniture, clothing and electronic sales.

Today’s Key Questions

- What happens to consumer spending once the stimulus expires?

- Will economic data released this week show any improvement?

- With 90 of 500 S&P 500 companies reporting this week, will earnings for Q2 be better than many expect?

Today’s Bible Verse – Psalm 91:1

“Whoever dwells in the shelter of the Most High will rest in the shadow of the Almighty.”

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