Quarterly Reviews

2nd Quarter – Markets Summary

Like us, you may be asking yourself has there ever been a first half of a year that has remotely resembled the last two quarters we’ve just lived through? In comparing the stock market activity of the past two periods, ying and yang, day and night, and two sides of a coin are all apt descriptions.

From peaks to lows, the First Quarter saw the most abrupt market drop from in the history of the U.S. Stock Market. While the S&P 500 fell by 20% for the quarter, some indexes dropped by double-digit percentages in a single market day.

The Second Quarter also produced activity of historic proportions, but this time it was full speed ahead. The NASDAQ lead the way gaining over 30%, followed by both the DOW Jones Industrial Average and the S&P 500 posting gains near 20%. Small and Mid-Cap growth stocks were the snapiest gainers, with over 32% and 30% returns, respectively.

Those market gains were not isolated to the United States, by any means. Developed Markets, measured by the MSCI EAFE index, rose over 15%. Australia lead the way with 29% followed by Germany up over 27%. Both countries were no doubt boosted by relatively effective measures to contain the COVID-19 virus pandemic.

Source: Baird Private Wealth; Q2 2020 Market Chart Book

The MSCI Emerging Markets index was up by more than 18%, paced by South Africa up over 27%. China came in under the average, but still notched a healthy 15% positive performance.

2nd Quarter – Economic backdrop
With large segments of the economy either idled or shut down due to efforts to contain the spreading pandemic, unemployment claims exploded. In April, the rate surged to 14.7%, fell to 13.3% in May, and then to 11.1% in June. The downward trend may be encouraging, as roughly a quarter of the unemployed are on furlough and expect to return to work as the economy continues to reopen, however all eyes remain on the COVID-19 numbers. As the Quarter closed and states began relaxing restrictions on social and business activity, the number of confirmed COVID-19 cases again began to increase. Fears of the second surge may lead to reversals of some of the renewed business activity, and pauses in the rehiring of workers. All of that combined may dampen hopes of a V-shaped economic recovery. The consequent negative impact on stock markets could be sudden and serious.

3rd Quarter – What’s next?
Since the global COVID-19 Pandemic emerged onto the global stage, it continues to arrange the set, dominate the scene, and force other actors to respond to its actions. Unfortunately, we weren’t handed a program for this play, so we don’t know if this is intermission, or nearing the final act.

We remain focused and alert to protect your accounts and find opportunities. We welcome you to contact us with any questions, or requests.

Thank you for your trust and confidence as we navigate these challenging times and continue our transition to new ownership.

Sources: JP: Morgan Guide to the Markets Q3 2020, Regency Wealth Mgmnt 2nd Quarter 2020 Investment Review, Baird Q2 2020 Market ChartBook, Morningstar Quarter End Markets Summary, JP Morgan Chase What Happened in the Markets in the 2nd Quarter 2020. Return Index does include reinvested dividends and the three-, five-and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable. 

This report should not be construed as a recommendation to invest in accordance with a particular Investment Strategy or to purchase or sell any particular securities. Market conditions can vary widely over time and can result in loss of portfolio value.

Benchmarks or indexes are used to track current and historical market performance by specific market segment (large/small capitalization) or investment style (growth/value). For the purpose of this report, we used the S&P 500 and corresponding members of the GICS® sectors, the S&P GSCI Gold Index, Barclays Aggregate Bond indices because they are well-known, prevalent indices. These Indices are not publicly available investment vehicles and are not available for purchase. U.S. government bonds and treasury bills are guaranteed by the U.S. government and offered a fixed rate of return and guaranteed principle value.

Investing in real estate can be subject to declines in the value of real estate. There are many factors that can affect the outcome of real estate investing including economic climate tax laws, interest rates and property taxes. Counsel Wealth Management is simply attempting to use a formulaic approach to choose holdings that meet certain qualifications criteria in an effort to meet a particular investment strategy. None of the indices listed or their respective owners are endorsed by nor have made endorsements of Counsel Wealth Management investing in any way.

Due to market volatility, current performance may be higher or lower than the performance shown. Counsel Wealth Management return data provided represents total return, including the reinvestment of dividends: interest received and realized capital gains

It is important to note that any strategy may under-perform and may produce negative results. Purchases and sales of securities may be made without regard to how long you have owned the securities. Any tax ramifications are not taken into consideration. The ongoing trading and turnover of holdings may create significant short term capital gains and/or long term capital gains in addition to interest and dividends creating income tax liability. Your attorney and accountant should be consulted regarding legal and tax implications.

ADV 2 brochures are available by request from your financial advisor.

Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC/MSRB. Advisory Services offered through Larson Wealth Partners, LLC, a Registered Investment Advisory firm. Larson Financial Securities and Larson Wealth Partners are affiliated. Larson Wealth Partners is doing business as Counsel Wealth Management.