John E. Chapman
Chief Executive Officer
Just when we thought this crazy year could not possibly become more chaotic, we receive the news that the President, the First Lady, and a senior aide tested positive for COVID-19. Of course we wish the President, and the others, a speedy recovery. With the election 32 days off, it is nearly impossible to predict how the President’s diagnosis will impact the election and the markets. Given this latest factor of uncertainty, it not surprising to see a spike in volatility as stocks began trading Friday morning. After opening sharply lower, the markets appear to be stabilizing and, at the time of this writing, are well above the lows for the morning.
In the midst of the news of regarding the President’s positive COVID test, there was also an important jobs report this morning. The results were mixed with a larger than expected decline in government jobs from the loss of census workers. The unemployment rate, however, came in a bit lower than expected at 7.9% versus expectations for a level of 8.2%.
Importantly, we must remain disciplined regarding our portfolio strategies as we assess the President’s diagnosis. Over the past several months, high frequency economic data has signaled recovery as the economy slowly reopens. Corporate earnings are quite good and stocks have had an unprecedented “V” shaped recovery from their lows in March. We still believe equities remain undervalued as we look through the next several months to a much better environment in 2021.
One lesson from this extraordinary year is that “panic” is never an investment strategy. This said, remaining calm in the midst of so much tumult is extraordinarily difficult. For many years we have been guided by a “facts over feelings” approach to important decisions, and have not allowed emotions to interfere with well structured long-term plans.
We assure you that your team at Clearwater Capital Partners is fully engaged and we are monitoring developments very closely. Please stay tuned for more frequent communications in the coming weeks as we move towards, and through, the elections.
-John
