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Observations & Insights (6/12/2020) Thumbnail

Observations & Insights (6/12/2020)

The stock market struggled to find footing this week, trying to find a balance between reopening hope and economic data...

  • Jobs: The U.S. data package remains mixed as some series show green shoots of recovery while other series show activity is still very much suppressed. May’s employment report of +2.5 million jobs m/m was an upside surprise and matches the downward trend in jobless claims. The economy has begun to turn the corner, but there is still a lot of work to do. Yesterday weekly jobless claims came in at 1.5M, in-line with consensus; continuing claims down to 20.9M. The Federal Reserve is projecting a 9.3% unemployment rate by the end of 2020, with Chair Powell expressing serious concern about the job market dynamics and COVID-19 disruption.
  • The Fed: Yesterday, the Fed released new economic projections and plans to keep interest rates low until 2022.Overall, Powell struck a dovish tone at his press conference, voicing continued concern over job market displacement and continuing to pressure Congress for more stimulus despite a better-than-expected May jobs report. 
  • Coronavirus Concern: US coronavirus cases hit the 2M mark late on Wednesday, as concerns about rising infections and hospitalizations grow. Texas, Arkansas, South Carolina, Nevada, Arizona, North Carolina, Oregon, Florida and Utah all set new highs in seven-day rolling case averages Wednesday, with several other states displaying worrying trends post-Memorial Day. Still, Bloomberg reporting that while the outbreaks have come weeks into state re-openings, it is not clear they are linked to increased economic activity and still too soon to gauge the impact that the protests that have occurred over the last few weeks will have on the number of coronavirus cases.
  • The Market: Many investors are feeling whipsawed by the massive moves in the market over the last three months and rightfully so. The pace of the drawdown and subsequent rebound is certainly one for the record books. The dislocation between economic fundamentals and equity market returns is also dumbfounding. Major equity indices are approaching (and in some cases recapturing) record high levels as investors look through terrible economic data in anticipation of reopening and some normalization. Although there has been a significant market rally over the last several weeks as investors looked past economic data, we do believe the market will experience pull backs, as investors weigh the positives and negatives in the economic activity.
     

Wealth Transfer and Tax Planning Considerations Under CARES & SECURE Acts

  • Join us on Wednesday, June 17th from Noon-1pm Central Time for a discussion on the wealth transfer and tax planning considerations now available with the recent passages of the CARES Act and SECURE Act. Cory Colvin, Baird’s Director of PWM Growth Strategy – Market Director, will moderate a discussion with Kelsey Clair, Baird’s Tax Strategist, and Laura Ames, Baird’s Sr. Estate Planner, as they take a deep dive into these legislative changes and the impact these new rules can have on your financial plan during your lifetime and your wealth transfer plan at death. Register here. 

 

Learning something new...

  • Viking.tv: Viking has put together a great collection of content if you want to explore the world and history from the comfort of your home.
  • EdX: edX is the trusted platform for education and learning. Founded by Harvard and MIT, edX is home to more than 20 million learners, the majority of top-ranked universities in the world and industry-leading companies. As a global nonprofit, edX is transforming traditional education, removing the barriers of cost, location and access.
  • Kahn Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. The Academy tackles math, science, computing, history, art history, economics, and more, including K-14 and test preparation (SAT, Praxis, LSAT) content.

Good News From Around the World

  • New Zealand has lifted almost all of its coronavirus restrictions after reporting no active cases in the country. At midnight local time (12:00 GMT), all of New Zealand moved to level one, the lowest of a four-tier alert system. Under new rules, social distancing is not required and there are no limits on public gatherings, but borders remain closed to foreigners. New Zealand has reported no new Covid-19 cases for more than two weeks.
  • Michael Jordan and Jordan Brand announced they will be donating $100 million over the next 10 years to organizations dedicated to ensuring racial equality, social justice and greater access to education
  • Using a remote sensing method, scientists working in southern Mexico found an ancient structure that has a total volume exceeding Egypt's Great Pyramid of Giza. The discovery in Aguada Fénix is the largest and oldest-known structure built by the Maya civilization, Reuters reports. A rectangular elevated platform made of clay and earth, it was built between 1000 and 800 BC, is nearly a quarter-mile wide and nine-tenths of a mile long, and stood 33 to 50 feet high. Researchers used Light Detection and Ranging, or Lidar, to find the structure. This technique utilizes laser light and other data recorded by an aerial system to generate three-dimensional information about the surface of the Earth. University of Arizona archaeologist Takeshi Inomata led the research, published Wednesday in Nature, and told Reuters researchers believe the structure was used "for special occasions, possibly tied to calendrical cycles." If you would like to learn more about how Lidar is discovering our ancient past, The Lost City of the Monkey God by Douglas Preston tells the story of how archaeologists used Lidar to search for archaeological sites in the Río Plátano Biosphere Reserve of the Gracias a Dios Department in the Mosquitia region of eastern Honduras.

From our families to yours, The Planning Group of the Northwest

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