Always focus on the front windshield and not the rear-view mirror
Putting the worst GDP Drop Ever in Perspective
Its hard to believe August is now upon us and the U.S. stock markets continue to trend up as optimism returns to Wall Street while Main Street USA continues to reopen. Yes, there is plenty of social unrest around the country, geopolitical tensions with China are increasing and horribly negative economic data continues to be released almost daily, but the major U.S. markets are trading at levels not seen since the very early days of COVID-19. In fact, while the DJIA and S&P 500 are close to their pre-COVID-19 days, NASDAQ reached a new high, cresting the 11,000-point threshold as of yesterday, which was an all time high.
There continues to be ongoing questioning around where the markets now sit vs. recent economic numbers. Remember back in late May when the Commerce Department reported that our U.S. economy shrank at an even faster pace than previously estimated in the first quarter of 2020 and consensus expectations suggested that the second quarter of 2020 would be far worse? Well, it happened.
On Thursday, July 30th, the Commerce Department reported that GDP decreased at an annual rate of 32.9% in the second quarter of 2020. It was the worst quarterly decline in history.
That almost 33% decline is on the heels of the 5% decline in the first quarter.
I won't go into full detail here, but below is an article I posted helping put this GDP decline into perspective.
I hope all of you have been able to take some time away this summer with family and escape some of the realities of today! I would even recommend a "media fast" as a way of reducing much of the negative noise. I can guess that it'll probably make you feel much better! I know it has for me when we've escaped reality for some weekend camping trips!
I know this has been an interesting and challenging year. Please reach out any time with questions, thoughts or comments, as i'm always here to help!
Ryan Mohr, CFP®
Putting the Worst GDP Drop Ever in Perspective
Remember back in late May when the Commerce Department reported that our U.S. economy shrank at an even faster pace than previously estimated in the first quarter of 2020 and consensus expectations suggested that the second quarter of 2020 would be far worse? Well, it happened.
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