Market Update August 2020

Market Update Summary (August 2020):

• The US Dollar continues to following our long-term prediction losing its strength as the reserve currency. 
• The trend is moving towards digital currency, which is being accelerated by the current climate of COVID-19 hygiene practices as we are discouraged from passing paper money from hand to hand.
• Gold has broken out to a place with no overhead, which means gold has never seen these prices before. This is a significantly bullish trend and indicates instability plus more evidence of an inflationary environment. 
• GDP is down by 32%, which is a record-level.
• The news is reporting that 90% of companies have reported beating their earning estimates. We want to point out that this is only after reducing estimates drastically. The true growth rate in the S&P is actually down 33% and revenues are down significantly.
• Small business revenue is not just flat, it’s actually declining.  As small businesses make up a majority of our economy, this is concerning. 
• The S&P 500 is showing a V-shaped recovery despite poor earnings this year. This current run-up generally comes with a pull-back, which could happen in September when liquidity tightens. 
• We are currently keeping some cash available to make strategic moves when they opportunities arise, as well as exposure in markets as they continue to defy current economic indicators. We have also taken some hedge positions to the US dollar in assets such as gold.

We hope everyone is enjoying the summer. We are diligently tracking current market conditions and future economic outlooks so we can position our clients as strategically as possible.  To set up a meeting to discuss your portfolio, please click here or give us a call.

Best regards,

The Willow Team
+1 413 236 2980