Daily Capital

Weekly Market Digest: How Will Coronavirus Change Global Consumption Habits?

On Friday, June 19th, Personal Capital staff received a paid day off in recognition of Juneteenth and to reflect, learn about or take actions to help end systemic racism. Juneteenth is a holiday which recognizes the day in 1865 in which General Gordon Granger of the Union Army announced that all people held as slaves in Texas were free.

Equities in both the U.S. and abroad closed positively for the week, as did Gold and the U.S. 10 Year Treasury.

The Tool To Beat

Unemployment information was mixed, with new unemployment claims coming in above expectations, and continuing claims declining.

Weekly Returns

S&P 500: 3097.7 (1.9%)
FTSE All-World ex-US(VEU): (0.9%)
US 10 Year Treasury Yield: 0.69% (-2.25%)
Gold: $1,743.01(0.7%)
EUR/USD: 1.118 (-0.7%)

Major Events

  • Monday – Federal Reserve communicates that it will begin purchases of Individual Corporate Bonds, expanding a recent development of beginning to purchase corporate debt as part of its effort to support the US financial system.
  • Tuesday – Census Bureau announces US Retail sales in May 2020 jumped over 17%, the largest monthly jump of all time.
  • Wednesday – World Health Organization announces malaria drug ‘Hydroxychloroquine’ will be dropped from its testing of treatment for the coronavirus.
  • Thursday – New jobless claims from prior week announced: 1.5 million new claims, above the 1.3 million expected, signaling that the impact of the coronavirus remains.
  • Friday – Apple announces that it is closing 11 stores in response to increased coronavirus cases in 4 states.

Our Take

The coronavirus continues to dominate news, markets, and many other aspects of the rest of our lives. In my client & personal interactions from the past several weeks there has been one consistent theme of conversation: Is this the new normal?

Many of my conversations of late have centered on speculation of how the coronavirus will change global consumption habits. Will business travel become a thing of the past? Are technology companies the best investment in this environment? Will Venice once again be a crowd filled tourist attraction?

While certainly a fascinating topic of discussion, there can be no certainty around how, or how long, coronavirus will be a dominating force for the global economy. In the face of this uncertainty, I believe it is best to be positioned for as many different outcomes as possible. One great way to take many possible outcomes head on, is through diversification.

Right now, Google, Facebook, Microsoft, Apple and Amazon combined represent more than 20% of the S&P 500. So if you have an S&P 500 fund in your investment portfolio, here’s some food for thought that we shared with our clients this week.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Paul Deer, CFP®
Paul is a Certified Financial Planner® and has been with Personal Capital since they first moved to Denver in 2013. With over a decade of industry experience, Paul’s current role as Director of Advisory Service keeps him focused on a team of over 60 Financial Advisors and their clients.

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