As we come into the shortened Independence Day holiday week, COVID-19 infection data continue to swing markets widely on a daily basis. Recent economic data has also been a mixed bag contributing to a mostly flat June. As the second quarter comes to a close, the question has become whether the current valuations for US equities reflect the true state of the economy or whether the valuation are assuming too optimistic of a short-term future. With state & local economies beginning a stop/start re-opening process, the recovery will begin to take shape -- V, U, or otherwise.
On behalf of our staff, we hope you have a healthy & peaceful Independence Day holiday.
Here's what I'm reading this week:
Weekly Commentary -- BlackRock -- Our Mid-Year Outlook
- The virus shock is accelerating key structural trends.
Tracking the interplay of containment measures and mobility changes on activity as economies have started to reopen.
Markets this week will focus on the latest U.S. employment data as well as on the virus case count and its implication on the economic restart.
Active Security Selection Could Prove Important During Recovery -- Capital Group
The Sobering Lessons of Market Timing -- Legg Mason
- During a downturn, if the market were to rebound suddenly, missing even a few trading days could potentially reduce long-term returns.
- Even though market returns may vary tremendously, rebounds can happen quickly and unexpectedly.
- Increased market volatility can also make market timing more challenging, since ups and downs may come closer together.