We sincerely hope this finds each of you safe and well. What a year 2020 has been so far.
The markets continue to be volatile and we cannot remember a time when there has been such a widespread disparity between what is happening in the economy and what is happening in the stock market.
The Economy & Market
We thought it would be helpful to share some hard data to illustrate this unprecedented market situation. The unemployment rate soared to a post-depression high of 14.7% in April. To put this in perspective nearly all of the jobs created after the financial crisis disappeared at least temporarily. In addition, April’s 11.2% drop in industrial production, a metric the Federal reserve has tracked since 1919, is the biggest monthly decline on record. However, since the near term market bottom on March 23rd (from feb 19th to march 23rd the S&P had dropped 34%) the S&P index eclipsed 3,000 by the end of May and has rebounded 36%. Simply put, economic activity is falling with depression like speed, but major indexes are in the midst of an impressive rally.
A combination of factors have fueled the rally since late March including the Federal Reserve’s response, and the government’s fiscal stimulus. Investors are also keeping close tabs on state re-openings, which will reemploy furloughed workers, help stabilize the economy, and set the stage for a possible economic rebound later in the summer. Talk of vaccines has also helped.
However, the stock market is a forward looking indicator and we should not be surprised with short term volatility in the market. Questions continue including will the virus lay down over the summer, how will reopenings proceed, how quickly can a readily available vaccine and treatment be developed, what might happen to COVID-19 next fall and Winter, and how quickly will consumers venture back into the public and resume spending patterns? These are very difficult to answer.
These times of uncertainty illustrate the importance of our goal based planning process where your strategies and investments are aligned with your goals and appropriate time frame.
We continue to focus our attention on your individual goals and unique opportunities this unprecedented time is presenting.
Planning For Those with College Students & 529 Plans
One additional planning consideration that we have not discussed in previous correspondence and commentary centers on college refunds and your 529 plans. With lockdowns, dorm closures, cancelled meal plans, and online learning, you may be due a refund from your college. [[https://www.collegeinvest.org/covid-19-college-refunds/ If you used 529 funds, your refund becomes a taxable distribution and is tagged with a 10% penalty. Normally, you have 60 days from the date of the refund to redeposit the refunded funds without liability. Today, the period has been extended. If the 60-day period ends on or after April 1, 2020 and before July 15, 2020, the redeposit can be made any time before July 15, 2020 or 60 days after the refund date, whichever is longer.
In addition, for those who are making monthly payments on student federally backed loans, those payment obligations are suspended through September 30th, 2020. 
We continue to work from our home office with occasional trips to our downtown office. However, we are looking forward to face to face meetings when the situation allows.
We always appreciate your feedback, and if you would like to hear more about certain topics, please let us know! As always, if we can be of any help or if you would like to discuss any concerns or issues we are here.
Stay safe, be well and enjoy your summer!
Robert Meath & Kerry Meath-Sinkin
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.
All performance referenced is historical and is no guarantee of future results.