Politically Incorrect — Your Health and Your Stocks

Join Chris Perras for the 6/26/2020 edition of Stock Talk!

Chris: Hey, I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group in Houston, Texas. Welcome to our June 26th podcast, Keeping you Connected to your Money. This week’s podcast is entitled, “Politically Incorrect — Politicians, Your Health and Stocks.” The S&P 500 sits this morning around 3,050. To put that in perspective, it’s almost exactly where it was at the start of June. Yes, that’s down about 5% off the early June recovery highs that were driven by short-covering and the Federal Reserve announcement about corporate bond buying. That spiked the S&P 500 back in early June to around 3,220, give or take.

The markets are almost flat with the level the S&P was exactly a month ago, on May 29th. Back then, I released my Friday podcast on May 29th, and it was entitled “Summer Stall —It’s Not Time to Rotate.” What have we learned during the past four weeks during the month of June? We have learned first and foremost, don’t listen to politicians on two things that matter most in your life. Don’t listen to politicians when it comes to matter of your finances and your health. My listeners know that I am generally a political conservative. That being said I’m not oblivious to societal change.

In late May and early June, just as our president, our governor at it, and other Republican governors in southern states, including Florida and Arizona, and our network news stations decided to push the mantra, “The virus health issue is dead and it’s on the back burner,” we were warning our clients and listeners that the virus issue you wasn’t over. Why? Because the data of the virus in Texas was starting to worsen late May and in early June.

The virus data in Texas was already getting worse. Justice Texas Governor Abbott was extolling the virtues of reopening the economy, which Oak Harvest was wholly in favor of. However, he decided not to mandate the use of mass or limiting or enforcing the size of social gatherings amongst younger citizens at bars, and other gathering places, which we disagreed with. The data was already getting worse in early June. In late May and early June, our contacts at hospitals and emergency rooms around Houston said that they were seeing an uptick in cases in young people. The large group protests in mid-June around the George Floyd killing only poured gas on a smoldering fire. The mass gatherings and protests were exactly the opposite of what we needed to suppress the virus.

Clients can log on to our web portal and see the websites that provide the early real data that we were tracking. For non-client listeners there the Texas Health and Human Services website and the Texas Med Center websites. Almost as soon as the protests ended in mid-June, the network news channels decided to start re-covering the virus and the economy again. However, by the time they did this, the S&P 500 had already dropped from 3,020 to around 3,000 to 3,050. Now everyone on TV and on the news channels has become an expert on the spread of the virus in Texas and the Houston Med Center. This has once again become the latest breaking news story on the national news.

This is four weeks after the facts were pretty obvious. Our governor has decided the virus has reasserted itself. Eureka. Wow, breaking news. Even so, he and other elected officials still won’t mandate the use of masks. Let me get this right. The open carry of firearms in Texas is okay, but mandating using a little paper cloth mask to help stop spreading the deadly virus we continue to know nothing about, that’s a no-no? Even today, Governor Abbott announced marginal changes to his opening plan. He’s shutting down river rafting businesses and some bars. That’s his answer to slow the virus down?

Listeners, this isn’t rocket science. It doesn’t take a degree in molecular biology to understand. Do not listen to politicians in matters of your health. Wear a mask and stay socially distant to reduce the likelihood of contracting and spreading the virus. That’s what health officials and health experts have said for four months now. The official timing of the normal summer rally begins this week, early next week. If it happens, you won’t hear about it until probably mid to late July. Until close to 75% of the move has already happened.

Our team believes the economy is going to be much improved and better than the TV networks tout in the second half of 2020 and 2021. Why? First, the collective energy and global healthcare intellect is racing to develop antivirals and vaccines for the virus. We will not bet against science, technology, and the human spirit to find a solution to this virus. We aren’t going to bet against the Federal Reserve, who while they have announced corporate bond-buying, the data shows, they have yet to actually step in and buy bonds. This data is also publicly available and free. The Federal Reserve is saving their ammunition in case it is needed in the second half of the year.

At Oak Harvest, we are comprehensive long-term financial planners. What this means is as our client you and your financial advisors should have a financial plan that is independent of the volatility of the stock markets. If you are retired, or in the process of retiring, please give us a call at 281-822-1350. We’re here to help you plan your financial future and help smooth the financial path you have into and through your retirement years with a customized retirement planning. Many blessings. Stay safe. Wear a mask. This is Chris Perras, Chief Investment Officer at Oak Harvest Financial.

Speaker 2: The proceeding content expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any cited data statistics and sources are not guaranteed. Content ideas and strategies discussed may not be right for your personal situation, and should not be considered as personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Investing involves the risk of loss and past performance does not guarantee future results.