Today, I'd like to provide an update on the coronavirus, including the effects on the economy and markets. We had some good news on the pandemic front this week, with the virus now back under control. Nationally, the daily spread rate is down to around 1 percent per day, and the daily number of new cases has held steady at about 55,000. Plus, the data shows that outbreaks are being contained in most states. One area of concern is testing. The number of tests has trended down over the past two weeks, and the positive rate remains well above what it should be.

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Market Risk Update. Thanks for the assist, Sam!

Markets continued to rise in July, showing the second wave of the pandemic was not enough to derail the economic recovery. The S&P 500 increased by a strong 5.64 percent during the month. The Nasdaq Composite and Dow Jones Industrial Average (DJIA) also saw positive performances, marking a solid start to the third quarter. Although the continued market rebound in July was certainly welcome for investors, very real risks to markets remain, as we can see when we look at the key factors that matter when determining the overall risk level.

The good news is that the second wave of infections looks to have peaked and turned back down in the past two weeks. Case growth is down significantly from the peak, and the case growth rate has ticked back down to the lows seen in mid-June. Two weeks ago, we discussed the peak of the second wave, and this decline is the next step. The data indicates that, in most states, outbreaks are being contained.

Yesterday I appeared on CNBC’s The Exchange to discuss the sectors I favor right now and the markets. 

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam!

We’ve reached that point in the election cycle where I've started getting questions, from both sides, about the effect of the upcoming election on the markets. “Surely,” the question goes (and note that it is not really a question), “if Candidate X wins, the market will tank for the following reasons . . .”

Last week’s major data releases all came in above expectations, helping to calm concerns that rising COVID-19 case counts are interrupting the economic recovery. Highlights included better-than-anticipated results for business confidence and hiring in July. This week will be another busy one, with updates focusing on inflation, retail sales, and the first look at consumer sentiment in August.

Brad here. In today’s post, Sarah Hargreaves, an investment management analyst on our Investment Management and Research team, discusses whether the coronavirus pandemic has pushed sustainable investing to a tipping point. Over to you, Sarah.

Brad here. Today, Rob Swanke, an analyst with Commonwealth’s Investment Management and Research team, takes a look at the benefits and the risks of preferred stock as a source of yield in a portfolio. Over to you, Rob.

Brad here. Today's post on why the stable value fund is becoming a more common investment option in retirement plan menus comes from Michael Geraci of Commonwealth's Retirement Consulting Services team. Take it away, Michael. 

In today’s uncertain economic environment, interest rates have declined, and the Fed has expressed its commitment to keeping them low. This environment has put pressure on money market funds yielding close to 0.1 percent, which has affected those retirement plan participants seeking preservation of capital. Many of these same participants are close to retirement and cannot afford to lose a significant portion of their retirement portfolios, but they’re also seeking returns to keep pace with inflation.