Monthly Recap: July

It’s hard to believe with everything that 2020 has already thrown at us that we are just two months into the second half of the year.  We have been rocked with everything from the Australian wildfires to NBA legend Kobe Bryant’s death.  We have had tensions in Iran and chaos in Iowa.  We saw a breakup in the Royal Family, the President impeached and then acquitted and Harvey Weinstein convicted…and that was only during the first two months of the year.  Those events in itself would have seemed like a busy year, then we received news of the first case of COVID-19 in the United States.  After that it seemed like time stood still. Every day seemed like a scene from Bill Murray’s Groundhog Day; we were all stuck in an endless loop of COVID related news.  As we were starting to get our bearings, the start of the summer was upended with the devastating death of George Floyd and the months of civil unrest that have ensued.   So, this year’s mantra, as Gloria Gaynor sang in 1978, continues to be “I WILL SURVIVE.”


July, for all intents and purposes, marked a strong start to the second half of the year for global markets. Stock prices started the month with optimism coming off early COVID vaccine trial results and a significantly-better-than expected June jobs report.  Despite multiple states reporting increases in infections, the major indices, both here and abroad, continued their climb upward.  Reported gains by index were:

·     Dow Jones Industrial Average  2.51% gain

·     S&P 500    5.64% gain

·     Nasdaq Composite   6.85% gain

·     MSCI EAFE Index (international) 2.33% gain

·     MSCI Emerging Markets  9.03% gain


As of July 31, more than half of the companies in the S&P 500 had reported earnings, with 84% of those reporting companies exceeding analyst expectations. 


The bond markets had a positive month as well.  The 10-year Treasury yields fell 0.14%, the inverse relationship between bond yield and bond price resulted in gains of over 1% in bond indices.  The fixed income markets were led once again by gains on high yield bonds returning 4.69% in July.


While the markets staged another strong month, we saw mixed results in the overall economy, which pointed to a moderating recovery compared to the relatively strong results seen in May and June.  The US observed a drop in consumer confidence and sentiment relative to the two preceding months, but saw in increase in business confidence and spending.  We continue to see strength in the housing market with home builder confidence sitting near all-time highs. 


July started out with a significant resurgence in new cases of the COVID-19 virus, though we have seen some success with localized steps taken to combat these outbreaks.  Areas that were hit hard in the initial wave have continued to moderate.  Other locations that were not significantly impacted initially are beginning to work through their first significant spikes in places such as Florida, Arizona, and Texas.  While new and total case numbers remain high, the daily growth rate fell from 2% at the start of the month to roughly 1.5% by month’s end.


August has had a reputation of being one of the more volatile months of the year.  In 2019, the S&P 500 index saw moves of over 1% in 11 of the 22 trading days.  One of the hypotheses for this volatility is people are vacationing and trading volume is lighter, often resulting in bloated movement.  With fewer people traveling and more focus on the economy, it’s hard to anticipate what this August will bring.  As has been the case for most of 2020, risk to the economic recovery continues to exist.  We continue to price in what appears to be best-case scenarios regarding health, economic improvement, and geopolitical risks.  It would still be prudent to continue to be prepared for headlines that result in outsize moves.


As always, we are here to address any thoughts, comments, questions or concerns that you may have.  We want to continue to be your sounding board when you need advice.  As a reminder our office hours have changed slightly; we are physically in the office Monday – Thursday from 10:00 am until 3:00 pm.  We hope you continue to find ways to make the best of these chaotic times, as well as continued health for you and your family.



digital banner 728x90 (2)






Ryan Flanders, CFA