Come, Sail Away- When Argentina canceled inbound flights in mid-March, Juan Manuel Ballestero resolved to get himself home from Portugal to his family some other way. Ballestero, 47, who has been sailing since he was 3 years old, loaded up his 29-foot sailboat with provisions and set out from the Portuguese island of Porto Santo. He spent 85 days at sea battling waves and was denied entry to a port where he planned to restock. On June 17 he finally arrived in Mar del Plata, in time to celebrate Father’s Day with his 90-year-old father. Completing the journey “gave me the taste of a mission accomplished,” Ballestero said. “But I have a strong desire to keep on sailing.”
Local Love- After Michelle Brenner got furloughed from her job, she decided to take some time to make lasagna, posting an offer in her Washington town’s Facebook group to make a pan for anyone who wanted it. As the requests poured in, Brenner set aside her $1,200 stimulus check for ingredients, then fundraised for more, becoming Gig Harbor’s resident “Lasagna Lady.” Three months and 1,200 pans later, Brenner spends eight hours every day feeding first responders and others in need. “It’s a pan of love,” said Brenner. “I’ll bet I could continue this for the rest of my life.”
Weekly Focus – Think About It
“Outside of a dog, a book is a man’s best friend. Inside of a dog it’s too dark to read.”
–Groucho Marx, Comedian
What a quarter!
Who could have guessed a global pandemic would produce outsized stock market returns? Near the end of last quarter (March 23), the Standard & Poor’s 500 Index was down 30.75 percent for the year, and it looked like 2020 was going to be a disappointing year for many investors.
Since then, the S&P 500 has gained 39 percent, reported The Economist. It rose 20 percent from March 31 to June 30. The Dow Jones Industrial Average also did well, delivering its second best quarterly showing since 1938. The Nasdaq Composite finished the quarter in positive territory.
A variety of factors contributed to the exceptional performance of U.S. stock markets during the quarter:
• The Federal Reserve maintained a supportive monetary policy stance. It has been buying Treasuries and mortgage-backed securities and funding emergency loans.
• The $2 trillion emergency spending package passed by Congress had impact. Stimulus checks, enhanced unemployment benefits, and emergency loans plumped personal income and supported businesses through second quarter closures.
• Positive data suggested economic recovery might be underway. In the United States, unemployment numbers improved, although they remained at historically high levels. Factory activity in China hit a three-month high, and the June Purchasing Manager’s Index in the United States came in above expectations.
Supportive central bank policies helped global economies during the second quarter, too. Stock markets in many regions, including Europe, China, and Japan, finished the second quarter higher. Positive economic data, optimism about coronavirus treatments, and hopes for a vaccine helped push markets higher, reported T. Rowe Price.
Consumer confidence also contributed. Callum Keown, Nicholas Jasinski, and Carleton English of Barron’s reported:
“On Tuesday, the Conference Board reported an 11-point rise in the June consumer confidence index, to 98.1 points. Economists’ consensus estimate had been for a 90.6 reading. American households remain more optimistic about the future than their current circumstances: the present situation index component of the survey rose 15.1 points, to 86.2, while the expectations index rose 9.1 points, to 106.”
It is possible consumer confidence in the United States will be dented by the recent upsurge in coronavirus cases. Last week, the spread of COVID-19 was gaining momentum again. Every day, from Wednesday through Saturday, more than more than 50,000 new cases were confirmed.
Many states and cities implemented new measures to slow the spread. One of the most important may be mask wearing. Researchers at Goldman Sachs reported:
“Thus, the upshot of our analysis is that a national face mask mandate could potentially substitute for renewed lockdowns that would otherwise subtract nearly 5 percent from GDP. It is important to recognize that this estimate is quite uncertain because it is based on a number of statistical relationships that are all measured with error. Despite the numerical uncertainty, however, our analysis suggests that the economic benefit from a face mask mandate and increased face mask usage could be sizable.”
LET’S ALL GO TO THE DRIVE-IN! Americans’ search for socially-distanced entertainment is leading them to drive-in theaters. Demand has been strong enough that pop up drive-ins are opening in sports venues, arenas, and fairgrounds across the United States, reports Sara Fischer of Axios News.
In the 1950s, there were more than 4,000 drive-in theaters in the United States. By October 2019, the number had dwindled to 305. More than one-third were concentrated in Pennsylvania, New York, Ohio, Indiana, and California, according to the United Drive-In Theater Owners Association.
Outdoor movie theaters tend to operate on razor-thin margins, reported The Washington Post. “…Drive-ins in the 21st century have flourished in more working-class and rural areas where land is cheaper and the venue appeals to families seeking to pile in the car for a night of inexpensive entertainment.”
Now, we’re seeing a resurgence of interest in outdoor movie venues. The sponsor of the Tribeca Film Festival has partnered with big box stores. They’ll be bringing “…the big screen to America’s backyard this summer…,” by offering movies in store parking lots.
So, set up the lawn chairs or deck out your cargo space with pillows and blankets, and settle in to watch some movies from a safe social distance in the great outdoors.
John Klevens, CFP ®
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Securities and Advisory Services offered by John Klevens through KMS Financial Services, Inc. Member FINRA/SIPC and an SEC Registered Investment Adviser. Klevens Capital Management and KMS are separate and unaffiliated.
Portions of this newsletter have been prepared by Peak Advisor
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* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
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