A Recession Unlike Any Other – August 19, 2020

This recession is like no other – government-induced to stop a pandemic. And the recovery has been unusually uneven.

Major stock market indexes have surpassed or are near highs, housing is surging, and retail sales have topped pre-Covid levels (U.S. Census data).

 But all is not well.

Employment and industrial production remain well below the pre-recession peak (U.S. BLS and Federal Reserve data, respectively).

While layoffs are declining, the current level remains elevated amid economic uncertainty.

Investor’s corner

The fiscal and monetary stimulus from the federal government and the Federal Reserve has been unprecedented. Both have supported the economic recovery and the stock market.

The strong economic bounce shouldn’t be discounted, but uncertainty continues to be the hallmark of forecasting models. Q3 GDP forecasts range from 10 to 28%, per the Blue Chip Consensus.

Risks remain, including uncertainty over a new stimulus plan, worries about a second Covid wave in the fall and winter, and tensions between the U.S. and China.

That said, control what you can control. A well-diversified portfolio tailored to your individual goals reduces volatility tied to today’s environment and can help place you on the road to your long-term financial goals.

Created 2020-08-19 14:38:34