The Lowry Letter®

Week of 9/22/2020

As we mentioned last week, we will hold 2 webinars on investing and the markets on October 8^th. One will be at noon and the other at 6pm. If you have questions for our speaker that day, please let us know. More info about him and the program is coming next week.

Also, as a post-election palate cleanser, we are planning a non-investment, non-political talk from one our favorite nature photographers on November 5 and look forward to sharing that with you soon.

We learned: some reason for optimism in the fight against Covid-19. The percentage increase in new cases has been steadily falling in the United States and worldwide. So far, there has not been a sharp increase in cases post-Labor Day and school starting again. That may change, but initial signs are promising, and continued caution is critical. There is a helpful update here.

We think: you should visit SSA.gov to review your expected social security benefit, if you haven’t done that already. Setting up an account and finding your estimated benefit only takes about 5-10 minutes. Let us know if you have any difficulty.

We like: avocado and were fascinated by the history of our favorite variety, Haas. All commercial, fruit-bearing Hass avocado trees have been grown from grafted seedlings propagated from a single tree that was grown from a seed planted by Rudolph Hass in 1926. Despite the success of his avocado, Hass never made more than $5,000 from his avocado patent and worked his entire life as a postman.

We read: about a Jeep owner who made a terrible off-road choice and got their vehicle stuck on a bike trail. The pictures tell the story. I’d love to know what happens to it.

We've been: fans of Blue Highway Pizza for many years and have been regularly impressed by the consistency of their food and service. This has continued even as we have been limited to take-out orders for the last 6 months. If you are in the Gainesville area it is worth your time

We recommend: Endeavor, a very satisfying British crime show. The newest season recently ran on PBS and past episodes are available on Amazon Prime.

Q: Are we still in a recession? I have a hard time understanding where we are.

A: A recession is usually defined as at least 2 consecutive quarters of declining economic activity. The current recession became “official” earlier this year and may be the largest since the great depression (see the JP Morgan Chart below).

The current trajectory of the economy means that we may exit the technical recession soon, but complete recovery is a long way off.

Business confidence has improved but may slow as the rate of recovery continues to taper off. Job growth has slowed, and layoffs continue. The biggest pain continues to be in low-wage jobs where the losses were greatest, and recovery has been slowest. The loss of the additional $600 unemployment benefit had an immediate impact on consumer spending and will be easier to see as 3^rd quarter economic data is collected.

With most recessions, a lot of the pain continues even after the recession ends and this will not be different. As a result, the market will continue to rise and fall in response to the evolving situation.