Finishing out your week June 26th 2020
Every week I think; “surely we won’t have more on our plate than last week” but it seems the pile of headlines and newsworthy events is higher than the week before. Wondering why markets closed where they did his week? Here are a few of the headlines that came across my feed this 4th Week of June 2020. I promise I will always find some good news at the end of every week!
IMF slashes world growth outlook for 2020 and sees sluggish turnaround next year June 24, 2020 by Greg Robb The International Monetary Fund again cut its global economic forecast for 2020 on Wednesday, saying that the coronavirus pandemic has caused an unprecedented decline in global activity. The IMF sees a global economic contraction of 4.9%, almost two% lower than three months ago. If realized, that would be the worst downturn since the Great Depression of the 1930s, far worse than the financial crisis of 2008-2010. In January, before COVID-19 had spread, the IMF had projected 3.3% global economic growth this year. “We are definitely not out of the woods. We have not escaped the great lockdown,” said Gita Gopinath, the IMF’s chief economist. ☹ Why does this matter to you? Stock prices go in lockstep with the earnings of the company. Corporate health and well-being go in lockstep with the economy. When global growth slows or goes negative, like in 2020, company earnings rarely go up. That is why the market closed down as it did this week.
The Fed caps bank dividend payments and suspends share-buybacks for 3rd quarter after stress tests June 25, 2020 by Greg Robb The central bank will proceed quarter-by-quarter given uncertainty over the economic outlook – Stress -Test day for banks. The Federal Reserve on Thursday voted to require large banks to preserve capital by suspending share repurchases and cap dividend payments in the 3rd quarter. In a 4-to-1 vote, the Fed will tie the distribution of dividends to a formula based on recent income. The formula sets 3rd quarter dividends at a level equal to average net income over the past four quarters. Fed Gov. Lael Brainard dissented from the decision. By that calculation, some banks may have to cut their dividends. A senior Fed official said this could be “binding” for some banks. In her dissent Brainard said: “I do not support giving the green light for large banks to deplete capital,” she said, arguing instead for a blanket suspension of dividends. It is good to stockpile cash. ☹ 😊 Why does this matter to you? With interest rates at all-time lows, keeping portfolio dividends at a goal of 2.5% will be more challenging. The plus? Companies with cash reserves will come out of this stronger.
Why Organic Matters - Non-Organic Cotton is Filled with Pesticides and Chemicals It might surprise you that cultivating cotton damages the environment more than any other crop. Harmful chemicals are used to grow cotton, and the seeds are genetically modified organisms (GMOs). More pesticides go into growing cotton than almost any other crop: it is fourth in fertilizer use. Non-organic cotton wastes water and cotton crops are a huge burden on the environment. According to the Organic Trade Association, it takes over 2,700 liters of water to create just one T-shirt and 11,000 liters to create an average pair of jeans! However, when you buy products that are made from organic cotton, you won’t be using as many pesticides and as much water, just to fill your closet with the cotton you love! Non-Organic Cotton Contributes to Climate Change – Cotton that isn’t organically-sourced leaves a huge carbon footprint. For every metric ton of non-organic cotton, 1.8 metric tons of carbon dioxide are produced. When you choose organic cotton, you are helping to combat climate change. 😊 Why does this matter to you? Doing the “right thing” to make our world a better place has a cumulative effect: you know you are doing what you can with even small decisions.
NY, NJ, and CT impose quarantines on travelers from COVID-19 hot-spot states ☹ 😊 Why does this matter to you? Plan a stay-cation this summer, put travel plans on hold and take what you would have spent on travel and lodging and invest in making your home more beautiful and restful.
3 Green Businesses Getting Creative During COVID-19 https://greenamerica.org/blog/3-green-businesses-getting-creative-during-covid-19 TS Designs | Traditional Medicinals | Syracuse Cultural Workers Not all companies are seeing lower sales and profits…sustainability bring opportunities too! Green businesses are getting creative amid the coronavirus pandemic to keep their stores open. We find their tenacity and commitment to the green economy inspiring in these challenging times. Here are three Green Business Network members that give us hope for a better tomorrow, and positive returns in a difficult time! TS Designs pivoted from their usual production to making upcycled masks from shirts. Their production increased from 250 a week to 250 a day and was able to create three new jobs, as well as give current employees more hours. They are now offering youth size masks and masks with custom branding. Traditional Medicinals has been in operation for over forty years, delivering plant-powered wellness in the form of herbal teas. A leader and pioneer in wellness tea in the US and Canada, Traditional Medicinals creates high-quality tea formulas utilizing the knowledge of trained herbalists and rigorously testing organic, medicinal-grade plants. “Demand is up for our seasonal and immune teas, but we have to work carefully to keep staffing and supply secure,” says Ben Couch. The company has moved its workforce remote except for the factory. "With one of our major suppliers, we've offered support for more vehicles to organize wild collection or seasonal work so people can safely continue their work." Syracuse Cultural Workers Syracuse Cultural Workers is a publisher committed to social justice, peace, sustainability, multiculturalism, feminism. They believe art is a critical component of activism. They have published and distributed various materials from calendars, posters, and T-shirts to books, music, and DVDs. In the wake of the pandemic, Syracuse Cultural Workers has highlighted 50 books that are “great reads for pandemic times.” These select readings are half off and running out fast. Learn more about Syracuse Cultural Workers and shop more titles on their website. 😊 Why does this matter to you? We are seeing companies and whole sectors profiting during this difficult time: keep looking for positive stories and opportunities to invest. I will always bring you companies who are changing the face of our world. It will lift your portfolio and your spirits as we move through the pandemic.
In 2019 “9th Inning Investing” was a constant theme and it is paying extra “peace-of-mind” dividends as your portfolio is less volatile. You can have confidence that portfolio management is a dynamic process. 😊
As the market topped in 2019, we worked to position your portfolio for the inevitable downturn that all business cycles go through. Today, we know that as even the worst markets and times come to an end…opportunities will come.
Thoughts or questions about anything in this re-cap? Use this Calendly link and book a few minutes on my calendar about anything that is on your mind.
You will love how with a few clicks you will be on my calendar!