The July Fourth holiday will be very different this year. Although it’s a time to enjoy family and friends, and maybe even watch some fireworks, social distancing and a new wave of COVID-19 cases also may take a seat at the picnic table. We all continue to believe our doctors and medical community will help us conquer this disease; however, with more than 10 million confirmed cases of COVID-19 around the globe (Johns Hopkins), this terrible fight is far from over.
A major second wave of COVID-19 is the big wild card. Although most of us don’t expect to go into full lockdown mode again like we did in March and April, more restrictions may be put in place, which could hinder the economic recovery. But it isn’t all bad news. On June 22, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Disease, said at a congressional hearing that a vaccine may be available by early 2021. He noted that in the past it has taken years to develop a vaccine against viruses, but with the entire world working together to beat COVID-19, this vaccine may be the fastest to market ever produced.
Voltaire said, “History never repeats itself. Man always does.” Given the stock market is driven by fear and greed, it has very human-like qualities, which means history may be a guide for what may happen next. In March 2003, stocks hit a major low before a huge spike into early summer, when stocks consolidated—or sat on their gains—during the summer months, followed by an eventual move higher later in the year. There was a very similar reaction in the summer of 2009 after the March 2009 bear market lows. So far in 2020 we’ve had the March lows and a huge rally, so historically, a summertime pullback or consolidation would be normal—and maybe even healthy.
While we’ve faced several health, social, and economic crises this year, July Fourth is a good time to think about how lucky we are to live in this great country and to remember the resilience and perseverance we’ve demonstrated over the past 244 years. History has shown us that better times will come.
On a personal note…
The family and I will be headed to Minnesota for the 4th this year. My wife is from there and spending the 4th on the lake is one of those things that is non-negotiable. As we weighed the choices between flying or driving, we talked with friends, family and even doctors about which option is safer. After much deliberation we decided the hour and a half flight was the better decision as opposed to the 16-hour drive with two young kids. It will be interesting to see what flying is like now days, we will obviously be very diligent about the safety precautions which have become a part of everyday life. But the real question is, will they still hand out golden wings for my kids, because if not, we may need an Air Marshall to deal with the ensuing tantrums. I will be sure to share our experience with you when we get back.
Best wishes for a happy and safe Fourth of July, and contact me if you have any questions.