COVID-19 Pandemic Market Recovery Update

Greetings Friends,

I hope you are doing well and staying safe.

Stock Market

Last week, investors were worried about increasing cases of COVID-19 being reported, its impact on the economy, slowing openings, and potential new shutdowns. “Reports are showing a surge in coronavirus cases in many places, including California, Arizona and Texas, which all broke daily records in June for the number of new infections. Stocks have given away some of the gains they racked up for the month. Heading into the second half of the year, investors and analysts are doubtful stocks can maintain the fierce momentum of April and May…The pandemic has fed investors’ appetite for volatility trading, a market tactic that allows traders to bet on big market swings. But analysts say these bets have grown so popular that they’re driving more volatility, making the markets riskier for everyone. Otani, Akane. “COVID-19 Is A Puzzle that Wall Street Can’t Solve.” WSJ. June 26, 2020. Everyone has their own individual tolerance level for market volatility.

Despite concerns over rising COVID-19 numbers much of the data continues to surprise to the upside. “After rising the previous week amid increased economic stimulus, global equities fell this week as investors worried that their worst fear of a second wave of the coronavirus may be coming to fruition and slowing the economic recovery. In the United States, the number of new daily cases of the virus rose to their highest level since the start of the pandemic. The one bright side of the reports is that deaths are not climbing at the same rates. Many governors across the country are stalling or reversing their reopening plans, including Texas, North Carolina, Louisiana, and Kansas. Despite the down week, investors cheered a successful stress test as well as the International Monetary Fund improving their economic outlook for the rest of 2020. Additionally, the World Trade Organization stated that the worst-case scenario for this year will likely be avoided because of the rapid government response. For the week, the S&P 500 declined 2.9 percent, while small cap stocks, as measured by the Russell 2000 Index, fell 2.8 percent.” Greer, Jason. “Dunham Insights for the Week of June 22, 2020.” Dunham Weekly Market Overview.” June 26, 2020. While the market performance wasn’t pretty, the economic data continues to be fairly positive.

CFRA, one of the world’s largest investment research firms, sees the stock market as having serious upside remaining for the year. “Using the June 19 Moody’s Baa yield of 3.57% and the S&P 500’s next-12-month EPS projection of $127.21, according to S&P Capital IQ consensus estimates, the Fed Model implies that the market could be trading around 3563 a year from now, or 15% higher than its June 19 close.” Stovall, Sam. “Market Week: Fed Models Bullish Message.” Barron’s. June 29, 2020. That is a very bullish outlook. What’s more, Brian Wesbury, Chief Economist at First Trust, believes our market is still undervalued. “We still project that the recovery process is going to take years; we don’t expect an unemployment rate at or below 4.0% until at least 2023. However, even with a steep drop in corporate profits in the second quarter, in the current low interest rate environment our model still says stocks are cheap, suggesting we are unlikely to see the market retest its lows.” Wesbury, Brian. “Not Locking Down.” First Trust: Monday Morning Outlook. June 29, 2020.

 Banks performed well under the stress tests. The Fed imposed some additional restrictions on banks as a safeguard for managing the impact of COVID-19 on the economic recovery. “Fresh figures showed U.S. consumer spending rose 8.2% in May after seeing a record drop in April, reflecting looser restrictions on businesses, federal stimulus and stepped-up unemployment payments…The Federal Reserve ordered banks to cap shareholder dividend payouts to preserve capital and barred share buybacks in the third quarter.” Banerji, Gunjan and Caitlin Ostroff. “US Stocks Fall More Than 2%, End Week Lower.” WSJ. June 27, 2020. The Fed did not implement unreasonable requirements.

 Yet, COVID-19 will likely impact bank earnings, which in turn may result in lower bank dividend payouts. Some banks like Wells Fargo have a significant dividend yield. So, bank stockholders may need to expect some variability in their income payments, especially if they are relying on that dividend yield to supplement their monthly income. “The Fed, also said future payouts would depend on bank earnings—and bank earnings will start to look worse as pre-coronavirus quarters drop out and are replaced by Covid-impaired results.” Levisohn, Ben. “Market Week: The Dow Just Had a Very Bad Week. It Could Get Worse." Barron’s. June 29, 2020. The potential reduction in income is a possibility in the short term. Fortunately, banks went into the COVID-19 pandemic well capitalized.

 Investors are currently hyper-focused on the trajectory of COVID-19 case numbers and the probability of new vaccines and treatments being developed and deployed rapidly. “The new leading indicators deal with the disease…“Right now, volatility in the stock market is heightened, because there is friction between the past, present, and future,” John Petrides, portfolio manager at Tocqueville Asset Management, tells Barron’s. “The future is looking past Covid. The present is dealing with Covid. The past is explaining what Covid has done.” The volatility is likely to continue...“I think the underlying trend, even though it is going to be jagged, is going to be one of gradual improvement in the numbers in fits and starts.” Salzman, Ari. “Investors at a Crossroads as Coronavirus Forces Rethinking of Openings.” Barron’s. June 29, 2020. So, it becomes important to be able to be able to handle the volatility and stay invested. The attached report illustrates how important it is to stay invested, so that you don’t miss the best days of the market. By not staying invested, and missing out on the best days in the market, you can dramatically impact your return. It’s not uncommon for the market’s best days to follow closely on the heels of the market’s worst days.

 In the interim, investors may want to consider investing a portion of their portfolio in gold or currencies. Fidelity recommends most equity investors have five percent of their portfolios invested in gold and/or currencies. Gold performs well in volatile markets. “June 25: Gold has surged to an eight-year high, and is set to rise much further. Keep an eye on $1,700 an ounce... a key support level. Aden, Pamela and Mary Anne Aden. “Market View: Gold Outshines the Buck.” Barron's. June 29, 2020. Gold also adds additional diversification to a portfolio since equities and gold are negatively correlated to each other.

The Economy

There are three types of recessions: structural, cyclical, and event driven. We are currently dealing with an event driven recession, which is typically the shortest type of recession. Please see the attached chart. Some economists believe this recession is already over. “The coronavirus contraction could end up being the shortest U.S. recession ever. In fact, there are good reasons to think it’s already over…“if the trough is in May or even June, the recession that followed the peak of February 2020 would be the shortest one on record.” Cementing the recovery depends on two things: the health situation not deteriorating, and continued federal government support for workers, businesses, and state and local governments…Even if there is no double dip or second wave, sustained rapid growth will be necessary to bring back the tens of millions of jobs that were lost. The recession may be over, but the hard work of recovery remains.” Klein, Matthew. “The Next 100 Days Will Test the Resilience of These Five Sectors.” Barron’s. June 29, 2020. Congress and the Fed will continue to be instrumental in helping the economy to continue to press forward.

Worried about US debt? Consider the following. “Even though federal government debt has tripled in dollar terms, America’s total indebtedness was lower in 2019 than in 2007.” Klein, Matthew. “If the Government Doesn’t Borrow Freely Now to Cover the Cost of the Virus, Many Will Pay Later.” Barron’s. June 29, 2020. The next wave of fiscal stimulus is likely to soon benefit state governments cash strapped from our recent shutdowns.

New ETF to Watch

Not sure which biotech company to buy? A brand new ETF has been created that includes biotech companies that are on the frontlines of infectious disease testing, vaccine creation, and treatment. “GERM is “designed to give direct exposure to the biotech companies engaged in the testing and treatments of infectious diseases…The fund’s top holdings include biotech upstarts such as Moderna, Alnylam Pharmaceuticals and BioNTech SE, as well as testing giants Lab Corp of America and Quest Diagnostics. Investors hoping for exposure to other pandemic staples such as surgical masks, cleaning supplies or paper products will have to look elsewhere.”Grant, Charley. “A Bet on Investors’ Infectious Enthusiasm.” WSJ. June 19, 2020. It will be an interesting ETF to watch.

Movie Theaters Re-Opening in July

Enter movie theaters at your own peril! “AMC Entertainment Holdings Inc. said Friday it will require customers to wear a mask when it reopens its theaters next month, reversing a controversial element of a plan the company announced just a day earlier…Enforcement remains an issue for all exhibitors, since it will be difficult to monitor moviegoers after screening starts without disrupting the viewing…All three major circuits expect to have operations up and running by mid-July, days ahead of when the first major studio releases are expected to hit screens.” Schwartzel, Erich. “AMC Theaters Mandate Masks for Moviegoers After All.” WSJ. June 20, 2020. Yet, not everyone is currently comfortable going to movie theaters including infectious disease experts. “I would honestly say I’m not comfortable going to the movies right now,” Dr. Carlos Del Rio, an Atlanta-based infectious diseases specialist said. “I want to see the numbers come down, want to see the cases go down. Right now, the only place I am comfortable going to the movies is my living room.” Whitten, Sarah. “It’s Too Soon to Go to a Movie Theater, Infectious Disease Experts Say.” CNBC. June 25, 2020. We might be wise to heed their advice.

Save your money and your health and consider staying at home and watching the latest movies On Demand, via Netlix, Amazon Prime Video, YouTube, or your other favorite movie watching method. “Both Kullar and Del Rio voiced concerns about the accountability of other customers at the cinema. For the most part, the other patrons in the theater will be strangers and there’s no way to determine if they have been judicious about safety measures or if they have disregarded them.” Whitten, Sarah. “It’s Too Soon to Go to a Movie Theater, Infectious Disease Experts Say.” CNBC. June 25, 2020. It is a difficult time for cruise companies, movie theaters, arenas, etc.

Apple

Apple is one of the world’s most popular and most profitable companies. “The iPhone company has become the [you name it all kinds of] devices, wearables, services, accessories, payments, finance, and experiences company…The number of people buying their first new iPhone has declined every year since its peak in 2016, when there were 129 million of them, according to calculations by independent Apple analyst Neil Cybart, founder of Above Avalon. In 2019, the number was 48 million, and it continues to decline. Yet during the last holiday season Apple experienced record-high quarterly revenue… In 2016, there were a billion active Apple devices. Now, Apple reports 1.5 billion. About two thirds [of the devices] are iPhones, says Mr. Cybart” Mims, Christopher. “The iPhone Isn’t the Cash Cow It Once Was. Apple Isn’t Worried.” WSJ. June 20, 2020. Apple has something for virtually everyone.

Apple’s increasing revenue growth are explained by two main stats and factors. First “Apple makes money from people using devices, not buying them…All those AirPods and Apple Music subscriptions—especially because Apple’s accessories and services have larger profit margins than its high-end hardware. The second stat explaining Apple’s continued growth is the number of active Apple devices in the world. Every year, that number goes up by about 100 million. Mims, Christopher. “The iPhone Isn’t the Cash Cow It Once Was. Apple Isn’t Worried.” WSJ. June 20, 2020. Their recurring revenue and subscriptions make a significant difference. Apple also offers financing options. “On June 15, the company announced 0% financing for Apple products—if they’re purchased with an Apple credit card. (Any fees incurred would also drive up Apple’s services revenue, of course.)” Mims, Christopher. “The iPhone Isn’t the Cash Cow It Once Was. Apple Isn’t Worried.” WSJ. June 20, 2020. They have been incredibly successful creating an Apple universe on which they can build, maintain, and service.

Apple has become successful at not only making itself a one stop mobile experience but also it’s own all encompassing custom manufacturer. “Even at its enormous size, Apple has figured out how to continue to grow, by vertically integrating, tempting us with more devices, accessories and apps, and selling lots and lots of phones, albeit at a lower margin. But it can’t do it alone: The golden goose depends on the cooperation of software and content partners, regulators—and more than a billion loyal customers.” Mims, Christopher. “The iPhone Isn’t the Cash Cow It Once Was. Apple Isn’t Worried.” WSJ. June 20, 2020. Sometimes eliminating a supplier can create additional upside.

Another way Apple is maintaining it’s status as the master of its universe is by building it’s own custom chips and eliminating one of its suppliers. Apple has the necessary economies of scale needed to produce their own chips instead of purchasing them. “The company, which released its first iPhone processor in 2010, said Monday it plans to ship Macs later this year with custom chips, a move that ends a 15-year technology partnership with Intel Corp. Apple said the custom-designed chips are more efficient and offer higher-performance graphics. The plan fits into Apple’s broader strategy of replacing many third-party parts with components designed in house. The technology giant’s built-for-purpose parts now account for about 42% of the costs of core iPhone components, according to Wayne Lam, an independent technology analyst, up from 8% less than five years ago. Custom components have cut costs, boosted performance and increased Apple’s control over future releases. The new Mac processors will shave $75 to $150 off the cost of building a computer, estimate analysts, who say Apple can pass those savings on to customers and shareholders.” Mickle, Tripp. “Apple Is the Newest Chip Giant in Town.” WSJ. June 23, 2020. Apple is doing a great job trimming costs for themselves and the consumer.

Currently Apple’s biggest vulnerability is the potential tech tax and the growing list of countries that are wanting to regulate or tax Apple. Certainly the pandemic is having an impact. Yet Apple is managing the Pandemic well. “Apple said Friday that it was temporarily shutting 11 stores across Florida, Arizona, North Carolina and South Carolina, following spikes in Covid-19 infections. The market sold off sharply on the news.” Chilkoti, Avantika and Alexander Osipovich. “Stocks End Mostly Lower as Apple Closes Stores.” WSJ. June 20, 2020. The stock has stayed at or near record prices in June. Apple has been very proactive at protecting their employees and customers during the pandemic.

Apple has one of the largest followings of any company in the world. Last week Apple held a virtual conference for developers. “As of Thursday, more than nine million people had watched [Tim Cook’s] keynote on YouTube.” Savitz, Eric. “Virtual Events Prove As Good as the Real Thing. Maybe Better.” Barron’s. June 29, 2020. Apple is certainly demonstrating virtual events can be even more successful than live events. They continue to provide great leadership during the pandemic and being able to pivot and increase revenue in a challenging environment.

China

China has been seeing great inflows of funds since they re-opened. “In May, inflows into equities have centered on China, which was the first to be hit by the virus and to reopen. Overseas investors put $4.8 billion into Chinese stocks last month, while pulling $4.1 billion out of other emerging-market equities, according to the data…Up until six or eight months ago it didn’t matter if you put your money in this emerging market or that emerging market. But now because of the cascading effects of Covid-19 you have regional differences of how this pandemic is developing and how policy makers are responding,” said Jonathan Fortun, an economist at the IIF.” Chilkoti, Avantika. “Investors Edge Back Into Emerging Markets.” WSJ. June 19, 2020. However, China might not be the best emerging market option for investing.

 The 10 largest emerging market countries are Argentina, Brazil, China, India, Indonesia, Mexico, Poland, South Africa, South Korea and Turkey. Egypt, Iran, Nigeria, Pakistan, Russia, Saudi Arabia, Taiwan, and Thailand are the next major emerging market countries. “Perhaps it is time to consider underweighting China within emerging-market allocations…Being the epicenter of today’s pandemic reinforced how little China seems willing to communicate, and cooperate, with the broader global village. Moreover, the pandemic has illuminated the importance for all companies and countries to diversify their supply channels beyond China. Long-standing suspicions surrounding China’s recurring acts of piracy, and its recent move toward a more autocratic government have left several companies with operations in China feeling vulnerable.” Paulsen, James. “Market View: Time to Underweight China.” Barron’s. June 29, 2020. We certainly have a number of emerging market options to consider.

 Iran

The US is making progress getting support on passage of an Iran arms embargo resolution being approved and is joined by Saudi Arabia. “This week the U.S. sent the U.N. Security Council a draft resolution to extend indefinitely an arms embargo on Iran. The Security Council has had restrictions on the country since 2007, but the 2015 nuclear deal allows for their gradual removal beginning in October…The U.S. wants to continue preventing Tehran from selling, buying or supplying weapons internationally. The embargo also requires countries to inspect cargo at home or at sea if they suspect it contains banned material…The arms embargo isn’t perfect, but removing it would give Iran an even freer hand to destabilize the region by exporting terror in support of its revolutionary ideology.” The Editorial Board. “The China-Russia-Iran Arms Alliance. WSJ. June 27, 2020. Extending the embargo is necessary to maintain international peace and security in the Middle East.

 US Corporate Bonds

The Fed has also made the bond market attractive. “Droves of foreign companies like Ardagh are raising U.S. dollars to capitalize on low borrowing costs and roaring investor demand for corporate debt. The sale of dollar bonds by overseas firms in April and May reached the highest level in seven years, according to Dealogic data. “I’ve been raising money for companies for 25 years and this is absolutely one of the best markets for borrowers I’ve ever seen,” said Andrew Karp, global head of investment-grade debt capital markets at Bank of America. This has created a frenzy of supply in the U.S. credit market. Companies have issued over $1 trillion of bonds in 2020, with March, April and May being the three busiest months ever for U.S. debt capital markets, according to Bank of America…That is largely because of the Fed. The central bank has taken measures to try to shield the U.S. economy from the pandemic and related lock-downs, including buying corporate debt for the first time. Buyers have absorbed this increased issuance of bonds. Credit funds in the U.S. saw the second-biggest monthly increase in net assets in April since at least 2007, rising by $109 billion, data from Morningstar showed. Hirstenstein, Anna. “ Foreign Businesses Hit Bonanza in US Credit Markets.” WSJ. June 20, 2020. The Fed has greatly improved conditions for companies to get loans.

Remington Arms

In case you missed it, the Navajo Nation may soon own Remington Arms Co. “Firearms manufacturer Remington Arms Co. is preparing to file for chapter 11 protection for the second time since 2018 and is in advanced talks for a potential bankruptcy sale to the Navajo Nation, people familiar with the matter said. The bankruptcy filing could come within days as the gun maker makes preparations for the Navajo Nation to serve as the lead bidder to purchase Remington’s assets out of chapter 11…The company also continues to face litigation from families of victims of the Sandy Hook school shooting. Families of the Connecticut school killings filed wrongful-death claims against Remington, accusing the gun maker of producing and selling a weapon unfit for civilian use…A bankruptcy sale would give a potential buyer the chance to purchase Remington free from legal liabilities, people familiar with the matter said.” Gladstone, Alexander and Andrew Scurria. “Gun Maker Remington Preps for Bankruptcy, Seeks Sale to Navajo Nation.” WSJ. June 26, 2020. Gun sales have risen dramatically during the pandemic. People stocked up on guns as much as they stocked up on other items.

Rooney Rule for Businesses

Corporations are making strides on increasing opportunities for women and minority to have a leadership place in their ranks. “Many companies are expected to adopt a policy resembling the National Football League’s controversial Rooney Rule, which requires organizations to interview a minority candidate for every open leadership position. Investors, including the comptroller stewarding New York City’s pension funds, have pushed this mandate at several companies. Critics of the NFL’s rule say that team owners still too often pick less-qualified white candidates for their coaching jobs, and black coaches and general managers remain underrepresented in the NFL. Still, proponents of applying the Rooney Rule to business point out that African-Americans and women have zero shot at getting a job until they’re given a chance to compete for it.” Stoll, John. “For CEOs, Pressure is On to Pivot From Say to Do on Equality.” WSJ. June 27, 2020. Many companies like Microsoft and Alphabet have a set percentage increase their targeting for increasing African American representation in leadership roles.

Airlines

More people are flying today than in April. “American Airlines says it will fill its planes completely as passengers start to return to traveling after the coronavirus pandemic decimated demand in recent months…United Airlines Holdings Inc. allows planes to fly full, though it also gives customers the [opportunity] to change flights. Spirit Airlines Inc. is also filling planes to capacity. Delta Air Lines Inc. and Southwest Airlines Co. are leaving open all middle seats, or the equivalent number of seats.” Sider, Alison. "American Airlines to Lift Limits on Number of Passengers on Board.” WSJ. June 26, 2020. Boeing stock rose this week after the company was allowed to resume test flights for the 737 Max. They have a backlog of 737 Max orders of over 500 planes.

Southwest and Delta remain the top airlines in the US. “The most valuable airline now, based on its equity value, is Southwest Airlines (LUV), worth $21 billion, well ahead of United and American Airlines Group (AAL). Delta Air Lines (DAL) is at $19 billion. Southwest rose to the top in good measure because of its fortress-like balance sheet and domestic focus.” Klein, Matthew. “The Next 100 Days Will Test the Resilience of These Five Sectors.” Barron’s. June 29, 2020. 

Pandemic Results in Fewer Choices, Sometimes Less Ends Up Being More

We have fewer choices today in everything from cars, toilet paper, menu items, to potato chips since the pandemic began. However, the reduced number of items offered has helped companies improve their supply chains, become more efficient, and deliver the end product faster.

Many of the reduced selections aren’t even missed. “As panic buying in March cleared supermarket shelves of staples, retail executives fretted over how fast they could replenish supplies. Retailers and food companies over the past several months have convened calls on which they decided food makers should cut back on options, streamline supply chains and concentrate production on the most-demanded goods, said CEO Mark Smucker of jam maker J.M. Smucker Co.” Gasparro, Annie, et. al. “Why the Consumer Has Fewer Choices-Maybe for Good.” WSJ. June 27, 2020. Retailers and food companies have had to make difficult decisions on which products to eliminate to increase productivity.

Georgia-Pacific has gone to great lengths to ensure they can always produce enough toilet paper quickly to meet demand going forward. “Toilet-paper demand early in the pandemic led paper-products company Georgia-Pacific LLC to switch all production of its Quilted Northern toilet paper to 328-sheet rolls; it had been also producing the brand in 164-sheet rolls. The company, owned by Koch Industries Inc., said it plans to stick with the bigger rolls even after the pandemic, which let it speed production and make distribution more efficient. Retailers had an easier time keeping Northern toilet paper in stock by having fewer varieties on shelves. “We’re making more than we used to in a shorter period of time,” said Jim Hannan, executive vice president for Koch in charge of Georgia-Pacific. “It’s more important that the market is being simplified.” Gasparro, Annie, et. al. “Why the Consumer Has Fewer Choices-Maybe for Good.” WSJ. June 27, 2020. The toilet paper shortage then moved to the frenzy for buying items for the home office including laptops, bikes, etc. People are still shopping.

Fast food chains have had more success than traditional restaurants. “Big fast-food chains have been bringing home the bacon. These chains have responded to the crisis by reducing menu options, closing dining rooms and offering better deals. As a result, customers have been returning in large numbers…Starbucks is planning to build more locations in urban areas designed specifically for takeout and advance ordering...Delivery, takeout and advance ordering make economic sense for restaurants even without a pandemic.” Grant, Charley. “The Future of Fast Food is Here.” WSJ. June 27, 2020. Customers are in search of the best deals while they’re stuck at home.

Albertson’s

Albertson’s, my favorite grocery store company went public again and was listed on Friday. I love shopping at Market Street followed up by Tom Thumb, both owned by Albertson’s. I’ve found the customer service and selection at Market Street to be unparalled. “Albertson’s debuted its IPO on Friday, June 26, 2020. “With more than 2,200 retail outlets under brands including Jewel-Osco, Vons and Tom Thumb, Albertsons is the nation’s second-largest traditional grocer behind market leader Kroger, but not counting big-box chains such as Walmart and Target…Albertsons, which benefits from stepped-up consumer demand for grocery items during the coronavirus pandemic, still has nearly $9 billion in debt to contend with, according to Fortune.” Robinson-Jacobs. Karen. “Albertsons Shares Slip As Investors Greet Its Return to the Public Markets with Meh.” Forbes. June 26, 2020. It will be interesting to watch how their stock performs.

Company Leaving the West Coast for Texas

Droves of companies are still moving to Texas. Texas is a melting pot that is welcoming to the business community and their employees. Peter Rex describes why he’s moving his company to Texas after trying Seattle and California. “We’re leaving the West Coast and heading to Texas. When it comes to talent, we’re confident we can attract the best without finding the same homogeneity of views. When it comes to housing, families making $100,000 to $200,000 a year can afford a good-size place. The policy environment in Texas encourages risk-taking and rewards workers. When it comes to schools, there are plenty of great options that don’t confuse indoctrination with education. And on matters of faith and morals, religious belief doesn’t make you a social outcast. In Texas, the quintessential American ideals of family, faith and freedom still reign supreme.” Rex, Peter. “I’m Leaving Seattle for Texas So My Employees Can Be Free.” WSJ. June 27, 2020. Texas is a business friendly state.

Florida’s School Voucher Program is Having Success

Florida’s bi-partisan school voucher program is having tremendous success at improving access to education, and allowing parents to choose the school that meets their children’s needs best. Families today are finding that the same school doesn’t necessarily meet the needs for each of their children due to their child’s special needs, activities, interests, and academic levels. “The measure (HB 7067), which went down to the final hours of the 2020 session, makes it easier for families to become eligible for financial support to attend a private school. And it quadruples the rate at which vouchers would grow annually.” Solochek, Jeffrey. “DeSantis expands Florida’s school voucher program.” Tampa Bay Times. June 25, 2020. It’s a program other states might consider implementing to improve access to schools of choice.

Test scores prove the choice of schooling has made a difference. “A National Bureau of Economic Research study this year found higher standardized test scores and lower absenteeism among students, especially low-income ones, who attended Florida public schools in areas where more students had access to private-school choice…Jeb Bush kicked off Florida’s school choice movement two decades ago, and Rick Scott (now Senator) and Mr. DeSantis have built on his success. More than 130,000 students in Florida now receive scholarships. Florida is helping to increase social mobility and future incomes by expanding educational opportunity for all.” The Editorial Board. “Florida’s School Choice Blowout.” WSJ. June 27, 2020. Students who remained in public school are also performing well. “Those students who remained in public schools during the expansion of Florida's tax-credit-funded private school vouchers program—the nation's largest, with more than 100,000 students participating— actually saw improvements in their reading and math test scores, and were on average suspended less often and absent less often.” Sawchuck, Stephen. “What happened to the students left behind as Florida’s private school vouchers expanded?" Education Week. February 24, 2020. I’m glad that improved school choice ultimately led to better test performance for public and private school students.

COVID-19

Sports are restarting with unknown concerns and issues for athletes who risk exposure to COVID-19 by playing. “We asked 17 cardiologists, epidemiologists, physicians and infectious disease experts how they would respond. They say they can’t guess the long-term effects of a disease that’s only six months old because there hasn’t been a long term. They’re encouraged by the low risk the virus poses to professional athletes in the short term. But they’re troubled by the severe complications that appear to strike at random and the range of potential consequences even in patients who don’t show symptoms. Their most pressing concerns for professional athletes include prolonged fatigue, shortness of breath and chest pain, blood clots, lung scarring and, in the worst-case scenario, heart inflammation triggering a cardiac arrest. The problem is that any permanent damage to their cardiovascular health would be highly disruptive for professional athletes, whose performance depends on their extraordinary physiology, said Neel Gandhi, an Emory University infectious disease epidemiologist.” Cohen, Ben and Louise Radnofsky. “The Unknown Effects of COVID-19.” WSJ. June 27, 2020. Major League Baseball is resuming with a 60 game schedule. The Nationals weren’t ahead at 60 games in last year. They were 27-33 at 60 games in, so the shorter schedule will create a different dynamic for teams.

Wrapping Up

The pandemic provides a great opportunity for you to take stock of your financial portfolio. Let me know if you would like a financial plan completed. Is your life insurance coverage sufficient? Are your beneficiaries current? Are you ready to consider long term care insurance coverage? These are all great things to consider while we all have a little more time on our hands.

It’s also a great time to be thinking about updating your will, medical directives, etc. Please let me know if you would like some estate planning attorney recommendations. I’m always happy to help.

Financial Education for Kids of All Ages

Jackson National has some fun and financial educational cartoons/animated episodes as part of their Cha Ching series that you can share with the favorite young people in your life. Please click here for a link on my website to share those fun videos with your young family/friends.

Miss a Previous Email from the COVID-19 Pandemic Recovery Series?

Please click here for a link to all the previous emails that I've sent out during the COVID-19 Pandemic Recovery. Please share them with your friends and family. If anyone you know has questions about the market, their portfolios, saving, investing, etc., please let me know. With their permission, I would be honored to call them.

Online Access

Miss my online access instruction email to our new Momentum platform? Please let me know, and I’ll resend it to you.

Upcoming Seminars

I hope you will join us for next month’s virtual seminar. Brian Perkes, Vice President with Advisors Asset Management, will present the Power of e-Commerce and Rick Williams, a Texas Certified Nursery Professional & Texas Master Gardener, will present Trees at the Dallas Arboretum. The July seminar will be held on Tuesday, July 21st from 11:30am-1pm via Go to Meeting.

Steve Alley, President of Alley Company, will present the program on Tuesday, August 18th from 11:30am-1pm. Alley Company is my favorite outside money manager. We will have a second speaker, as well. I will be able to announce his presentation info soon. You won’t want to miss either presentation!

And I’m already working on September! Hopefully by September we will be able to resume live lunch seminars at the Park City Club. However, whenever we resume lunch seminars, we will continue to stream the seminar presentation virtually so you don’t have to be physically present to attend and participate.

Thank you for reading!

That's all for this week. Please let me know if there is anything Rocio, Alicia, or I can do to help. You and your family have my best wishes for a fabulous 4th. Take care!

Best regards,

Happy Franklin

Financial Advisor