I bet you had a very special 4th of July, without any parties, picnics, or watching spectacular fireworks with crowds. However, we have a long vacation with more time to share with families, and for me, more time to read.

As the COVID 19 virus has chugged along in the states, so has the stock market. Until July 9th, S&P 500 has bounced back  41% from its March low. A lot of people are bewildered by this paradox.  Last month, when we discussed the reasons, I attributed the cause to the market expecting a smooth reopening of economy in the second half of the year, and the investors feared to lag behind the upside potential.  And behind these expectations and investor behaviors is the record amount of cash sitting in the side line, waiting to put back in the market whenever there is an opportunity.  

Recently, investors tried to digest new data regarding rapidly increasing number of infections after reopening economy. This leads to investors being worried about prolonged social distancing and delay of reopening economy. Out of this consideration, coupled with record of cash sitting in the side line, we saw Nasdaq composite has rushed to a new record, with Amazon, Microsoft, and Apple having contributed the most.  Money also flowed into emerging countries, especially where the pandemic is in check. Another phenomenon which deserves our attention is record inflow of Gold ETF fund. This may imply that the market will have pull back of the stock market and also future inflation risk.

I would like to recommend a book, The Great Influenza: The Story of the Deadliest Pandemic in History by John Barry, a New York Times Bestseller in 2005, which tells the story of  1918 so-called Spanish Flu. “History Doesn’t Repeat Itself, but It Often Rhymes” . As the virus moved, two parallel struggles emerged. One encompassed all of the nation. Society would have to gather itself to meet this test, or collapse. The other struggle lay within one tight community of scientists.

IMPORTANT DISCLOSURES

This information has been designed for general informational and educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security. Such offers can only be made where lawful under applicable law. These materials have been obtained and derived based on information from public and private sources that Pearl Wealth Management LLC believes to be reliable. However, no representation, warranty or undertaking, stated or implied, is given as to the accuracy or completeness of the information contained herein, and Pearl Wealth Management expressly disclaims any liability for the accuracy and completeness of this information. Pearl Wealth Management does not intend to provide investment advice through these materials and does not represent that any market position, economic forecast, securities or services are suitable for any investor. Investors are advised not to rely on these materials in the process of making a fully informed investment decision and they do not render business, tax or legal advice. Each client or prospective client should consult his/her own attorney, business advisor and tax advisor as to legal, business, tax and related matters concerning the information contained herein. The information, opinions and views contained herein have not been tailored to the investment objectives of any one individual, are current only as of the date noted and may be subject to change at any time without prior notice. Past performance does not guarantee future results. All investing involves risk of loss including the possible loss of principal.

As the COVID 19 virus has chugged along in the states, so has the stock market. Until July 9th, S&P 500 has bounced back  41% from its March low. A lot of people are bewildered by this paradox.  Last month, when we discussed the reasons, I attributed the cause to the market expecting a smooth reopening of economy in the second half of the year, and the investors feared to lag behind the upside potential.  And behind these expectations and investor behaviors is the record amount of cash sitting in the side line, waiting to put back in the market whenever there is an opportunity.  

Recently, investors tried to digest new data regarding rapidly increasing number of infections after reopening economy. This leads to investors being worried about prolonged social distancing and delay of reopening economy. Out of this consideration, coupled with record of cash sitting in the side line, we saw Nasdaq composite has rushed to a new record, with Amazon, Microsoft, and Apple having contributed the most.  Money also flowed into emerging countries, especially where the pandemic is in check. Another phenomenon which deserves our attention is record inflow of Gold ETF fund. This may imply that the market will have pull back of the stock market and also future inflation risk.

I would like to recommend a book, The Great Influenza: The Story of the Deadliest Pandemic in History by John Barry, a New York Times Bestseller in 2005, which tells the story of  1918 so-called Spanish Flu. History always repeats itself. As the virus moved, two parallel struggles emerged. One encompassed all of the nation. Society would have to gather itself to meet this test, or collapse. The other struggle lay within one tight community of scientists.

IMPORTANT DISCLOSURES

This information has been designed for general informational and educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security. Such offers can only be made where lawful under applicable law. These materials have been obtained and derived based on information from public and private sources that Pearl Wealth Management LLC believes to be reliable. However, no representation, warranty or undertaking, stated or implied, is given as to the accuracy or completeness of the information contained herein, and Pearl Wealth Management expressly disclaims any liability for the accuracy and completeness of this information. Pearl Wealth Management does not intend to provide investment advice through these materials and does not represent that any market position, economic forecast, securities or services are suitable for any investor. Investors are advised not to rely on these materials in the process of making a fully informed investment decision and they do not render business, tax or legal advice. Each client or prospective client should consult his/her own attorney, business advisor and tax advisor as to legal, business, tax and related matters concerning the information contained herein. The information, opinions and views contained herein have not been tailored to the investment objectives of any one individual, are current only as of the date noted and may be subject to change at any time without prior notice. Past performance does not guarantee future results. All investing involves risk of loss including the possible loss of principal.

Jessie Luo


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