We upgraded our Business Confidence Indicator to green. 

Stocks continued their move higher last month as the S&P 500 rallied over 5% in July. (YCharts) This brings the S&P 500 to breakeven for the year, something that many investors would have had a hard time imagining during the market lows in March.  While the rally in stocks is much welcomed there is concern that the market’s recovery does not accurately reflect the damage done in the economy.  We agree.  While the market is generally considered a leading indicator, we don’t believe the dramatic move higher is an “all-clear” signal for stocks (or the economy).

We recently updated our economic dashboard by upgrading our Market Technicals indicator to green. The sustained move higher in stocks since the lows in March has shifted the underlying trend back to positive leading to this change.

June has come to a close and with that we leave behind a very eventful 1^st half of 2020.  Most of us probably wish we could fast forward into 2021 as the pandemic has been felt by all in one way or another.

We upgraded our business confidence indicator to yellow. 

Every year we look forward to connecting with our clients and their families at the Holiday Brunch in December.  Unfortunately, given the growing concerns around COVID-19 our venue has made the difficult decision to cancel all large events, including ours. 

We have determined that rather than try to reschedule we will be canceling the event for 2020 given the ongoing uncertainty around coronavirus, potential risk of a second wave, and challenges finding a suitable venue.  While this was a tough call to make our priority is the health and safety of all of our clients, families, and employees.  We remain committed to keep the tradition going in the future and we look forward to celebrating it with you in 2021!

Sincerely Enzo T. Pellegrino and your Team at TLWM 

We recently updated two indicators on our economic dashboard: Market Breadth and Market Sentiment. 

The stock market rallied for a second straight month as the S&P 500 was up about 5% for May as many states began the process of “re-opening” the economy. (YCharts)  The rally in stocks came as investors tried to balance both good and bad news.  Good news came in the form of potential progress on a COVID-19 vaccine and therapies to treat the virus, monetary and fiscal stimulus around the globe, and anticipation of increased economic activity.  The bad news came in the form of very challenging economic data which included ongoing jobless claims, a contracting economy, and an official unemployment rate of 14.7%. (YCharts)

We continue to be positioned cautiously within portfolios as we weigh the impact of both good and bad news.  Our economic dashboard continues to flash warning signs which we believe are reflective of an ongoing recessionary environment justifying reduced risk for the time being.  We continue to watch closely the following risks which we believe have the potential to lead to future volatility:

We recently downgraded our Leading Economic Index (LEI) indicator to red.  We had moved this indicator to warning last month after the initial decline due to the COVID-19 pandemic. This indicator has further deteriorated at a rapid rate and we feel it should be downgraded again at this time.

We are another month into the COVID-19 pandemic and what a whirlwind it has been!  So much has changed over the past month in not only our day to day lives, but also in the stock market as we’ve seen a much-needed rally. The S&P 500 was up over 12% in April and about 30% from the lows on March 23^rd. (YCharts) While investors have been excited to see this move higher, we don’t believe that this rally has necessarily sounded the “all-clear” for stocks.  As such, we have used this move higher to what we believe is our advantage and have continued to try to reduce risk within portfolios.  

Despite stocks rallying, we saw historically weak economic data throughout April.  We’ve highlighted a few data points below that demonstrate the impact of shutting down most of the economy and sheltering at home