Investing in America

By June 19, 2020Weekly TGIF

What a week. Nothing should come as a surprise anymore; This is the year 2020. Between the Bolton book leak, the spiking virus cases, 20 Million Americans still unemployed, Juneteenth and the fact that Major League Baseball still can’t seem to get out of its own way, there is so much going on. And I didn’t even mention the tension along the Chinese-Indian border or the building blown-up along the Korean Peninsula. Planet Earth is a complex place.

I wrote this in my piece back on March 24, at the Market lows. It still applies:

I heard someone say today that perhaps the Universe is sending a message. The implication is Planet Earth has become too divisive and combative. There’s a lot of hate and selfishness. Respect for others has been lacking. Attention has often focused on short-term success and instant gratification at the expense of a healthy and sustainable future. This has certainly been a wake-up call. Priorities get reset. You sure do recognize what is most important in our lives. I’ve been thinking about this all day. I’m going to be focused on this for the days, weeks and years to come.

This is indeed a moment. The Olympics have been postponed. But the world just might be coming together in 2020 for a shared purpose. It’s never too late for that.

We blew it. I’m just going to say it. Our society blew the opportunity to come together. Everything has become so politicized. Instead of coming closer together as a nation, it seems as though the divide is widening. America is hurting. America is not its best self right now. That belief seems to be close to unanimous. There is common ground on dissatisfaction. Fortunately, there’s still time to come together.

There needs to be a better understanding of who we are and where we’ve been, so that we can always be a better version of us going forward. That really applies to anyone and everyone. We the People have to re-embrace the fact that our nation is not perfect. But the greatness is that we admit it and have a constant pursuit to be more perfect. That’s a pretty special protocol our Founding Fathers established. The Great American Experiment is highly unique. It’s really being tested in 2020.

Today is a milestone in America. It’s Juneteenth, the oldest-known holiday honoring the end of slavery in America. It dates back to the end of the Civil War in 1865. In response to the weeks of protests for racial justice, many companies have embraced Juneteenth 2020. Over 200 companies have made the day a paid holiday, including Twitter, Square, Adobe, Altria, UBER and Nike. JPMorgan Chase closed bank branches early. The Detroit Three – GM, Ford and Fiat Chrysler – held moments of silence. That’s new.

The Future ain’t what it used to be. It’s one of my favorite of Yogi Berra’s infamous quotes. It’s so accurate for today and tomorrow. PepsiCo announced it is ending the Aunt Jemima brand of syrup. It dates back to 1889. Mars quickly followed suit, saying it is making a change with its Uncle Ben’s rice. America is doing some soul searching. There is clearly a great deal of yelling and anger, but there’s also a lot of listening and thinking. Change is happening.

With all that has been going on, politically, economically and socially, the Stock Market has been remarkably strong and resilient. Stocks have been consolidating its massive gains lately with a grinding sideways price action after last Thursday’s sharp decline.

Today was a “quad witching day,” which refers to the simultaneous expiration of four sets of contracts: market index futures, stock futures, market index options and stock options. This circumstantial event generally leads to higher volatility and more trading volume, giving speculators an opportunity for quick arbitrage opportunities.

Stocks continue to stay elevated despite the significant spike in coronavirus cases across the country. The Market doesn’t seem to care. The COVID narrative continues to underwhelm investors. Ten states saw a record number of cases this week as Texas, Arizona and Florida emerge as the new epicenters.

Medical experts believe a vaccine will not be available until well into 2021 and economists forecast a surge in business bankruptcies over the coming months due to the COVID driven shutdown. Apple made a somewhat surprising announcement that it is closing a number of stores in response to the virus spread after recently re-opening. The second half of 2020 is going to be as challenging as the first.

As investors, we are always looking for optimism. We embrace new ways and innovation. We look for new ideas. We look for new products and devices. We look for growth. There is so much to like as investors in the Digital Age. The best ideas generally come from people that are positive on the future. We are positive on the future. We are realistic about the present. And we are proud to be investors in America.

Have a nice weekend. We’ll be back, dark and early on Monday.

Mike

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