Carrying On- With news that the annual Nathan’s Famous hot dog–eating competition will be held without fans on July 4 in New York’s Coney Island. Joey Chestnut, the 12-time champion, hopes to break his own record of 74 hot dogs in 10 minutes. “If I’m feeling it,” said Chestnut, “77 is doable.”
Once Upon a Time in 2020- A Vermont Buddhist who recently emerged from a 75-day meditation retreat is being hailed as a modern-day Rip Van Winkle for all the history he knew nothing about. “Did I miss anything?” Daniel Thorson, 33, tweeted when his period of self-imposed isolation ended. Thorson was stunned to discover that the coronavirus and the George Floyd protests had roiled America while he was holed up in a cabin. People now view him “like an oddity,” Thorson said, explaining he’s still trying to “piece it back together.”
Oh Snap!- A massive alligator snapping turtle native to swamps was discovered lumbering down a residential street in Alexandria, Va. Geanetta Fanning said she couldn’t believe her eyes when she first saw the fearsome, 65-pound reptile. The species is native to the Gulf Coast, and this specimen is likely a former pet that was dumped by its owner, said John Kleopfer, a herpetologist for the state. “It’s a living dinosaur,” he said, after helping to capture the monster. “If you get your finger in there, it’s a good bet it’s coming off.”
Weekly Focus – Think About It
“Do not judge me by my successes, judge me by how many times I fell down and got back up again.”
–Nelson Mandela, Former President of South Africa
Blame it on the coronavirus.
Stock markets in the United States and Europe retreated last week as the number of new COVID-19 cases increased steadily in America. On Thursday, there were more than 44,000 new cases, the highest daily total to date, according to data from the Centers for Disease Control.
“The turn has created a new puzzle for investors, many of whom had started focusing on 2021 earnings expectations as the next performance-driver for stocks. The old market gauges, like manufacturing surveys, jobs tallies, and retail sales, feel like lagging indicators. The new leading indicators deal with the disease. Yet tracking its progress is tricky even for epidemiologists who have studied these issues for decades,” reported Avi Salzman of Barron’s.
Another piece of the investment puzzle was reshaped when the Federal Reserve (Fed) released bank stress test results last week. It found most banks were likely to remain well-capitalized if economic growth rebounds relatively quickly. However, in a worst-case economic recovery scenario, banks did not fare as well. Consequently, the Fed suspended share buybacks and capped the dividends banks can pay investors, reported Alexandra Scaggs of Barron’s.
“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. Even that decision might not have been a problem if the market believed the spread of COVID was under control. Then the numbers started coming out. Florida’s seven-day average of cases grew 7.8 percent, up from the previous day’s 4.1 percent. Arizona’s jumped to 5.4 percent, from 2.9 percent. In Texas, the positivity rate – that is, the number of tests divided by positive results – hit 11.8 percent,” reported Ben Levisohn of Barron’s.
Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, dispelled the notion this is a second wave of the virus. He told The Wall Street Journal, “People keep talking about a second wave…We’re still in a first wave.”
COLLEGE SPORTS BUDGET CUTS. College and university campuses across the world are facing serious financial shortfalls. “Revenues are plummeting as students (particularly international ones) remain home or rethink future plans, and endowment funds implode as stock markets drop,” reported Alexandra Witze in Nature.
One way some schools are trying to balance budgets is by cutting sports programs. Kendall Baker of Axios News reported athletic directors and conference commissioners are brainstorming ways to lower spending, including reducing travel by focusing on regional play and eliminating conference championship tournaments. The sports affected may include:
• Field hockey
• Men’s and women’s soccer
• Men’s and women’s tennis
• Women’s lacrosse
During the past 12 weeks, 43 Division I teams have been eliminated from the NCAA, reported Baker. “Men’s and women’s tennis have been hit the hardest, as have Olympic sports like volleyball. That could affect future podiums: 88 percent of American athletes in the Rio Games had played their sport in college.”
Power 5 conferences, which include the Atlantic Coast, Big 12, Big Ten, Pac-12, and Southeastern Conferences have not yet eliminated a sports team. That may change if the highly lucrative football season is cancelled due to COVID and television deals, which account for about a third of revenue, disappear.
A source cited by Ross Dellenger and Pat Forde of Sports Illustrated suggested the accounting may deserve a closer look. So-called ‘non-revenue generating’ sports often generate income for colleges and universities because many athletes pay tuition:
“While trimming their own budget, athletic directors are often hurting their university’s bursar office. Sure, eliminating a men’s track team might save $1 million a year in the athletic budget, but what is it costing the academic side…A track team could be generating over $1 million to the university side.”
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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