Successfully Navigating the Pandemic Requires Work and Patience
We believe accomplishing any important goal requires sustained effort and patience. We must remember this as we push to find a vaccine for COVID-19.
I’m dismayed to see what should be a coordinated effort, seeking something of universal benefit, devolve into another partisan debate. It’s becoming pretty hard to watch. Ok, I’ll be honest—I stopped watching.
Until a vaccine is in place, I believe the global economy will struggle to recover.
According to the Washington Center for Equitable Growth, we are beginning the process of reopening the economy, but a lot of damage was already done. Damage that will be with us for a while.
According to the Wall Street Journal, many large businesses have pulled in the reins on spending. Prior to the crisis, capital spending plans by companies were to be a source of economic growth. Two months later, those spending plans have evaporated and with it, the growth it was to provide.
Axios says small businesses will bear the brunt of economic damage. Businesses that rely on social interaction will suffer the worst. Not only have they lost a couple months of business, but they are being limited in how they can reopen; many will not survive.
The CARES Act provides fiscal stimulus meant as a bridge for business owners, but is the bridge long enough? The answer will likely be “no” for many small businesses.
Still, the S&P 500 bottomed on March 23, 2020 as found on Yahoo Finance, thanks to what is being called the Federal Reserve Put. Investors know that the central bank will do whatever is necessary to prevent the collapse of the economy and the markets.
Eventually, the market will turn from Federal policy and focus on how the economy recovers from this crisis. It’s likely that assessment is less optimistic than what stocks currently reflect.
That said, the long-haul is still bright; we will get through this… just not immediately.
At Nicollet Investment Management we are doing the hard work that will bear fruit down the road. There are no shortcuts.
Today is an excellent time to review whether you are positioned properly to navigate what comes next.