The good news this week is that things are about the same as they were last week. The reason this is good news is that things had been getting worse. So, this stabilization represents progress. It also indicates that, in many states, outbreaks are being contained, as expected.

While it is still early days, with only 9 percent of S&P 500 companies reporting as of the end of last week, the initial earnings reports seem to show that things are still not good. According to FactSet, quarterly earnings are down, so far, by 44 percent. If this number holds, it would be the second-worst quarterly drop since the end of 2008 during the financial crisis. Scary news—but not unexpected.

Brad here. “Value” is an often-mentioned word, but few people have really considered what it means in the context of the whole economy. A short while ago, Pete Essele, one of Commonwealth’s most senior portfolio managers, wrote a post for this blog in which he discusses value investing and its underperformance. That was the first part of the story. Here, he takes a deeper look at why that underperformance happened—with very interesting implications for the future. Take it away, Pete!

Last week was jam-packed with economic updates, highlighted by better-than-expected industrial production and retail sales reports showing a continuing recovery as reopening efforts took hold in June. This week, the economic update front will be relatively quiet, with a focus on home sales and the weekly initial jobless claims report.

Today, I'd like to provide an update on the coronavirus, including its effect on the economy and markets. On the medical front, it was another bad week. The viral outbreaks continued to get worse, with several health care systems getting close to capacity. So far, however, most of the damage remains localized. And with affected states starting to impose restrictive measures, we’ve started to move in the right direction, and the likelihood of another national shutdown remains small.

This week’s update is somewhat worse than last week’s. Medical risks are still rising. Outbreaks in several states (notably, Arizona, California, Florida, and Texas) continued to get worse, even as other states began showing faster outbreaks.

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 June, as efforts to reopen state economies across the country continued throughout the month. Investors reacted to the continued reopening with optimism, driving the S&P 500 up 1.99 percent in June following a 4.76 percent increase in May. These positive results came despite some midmonth volatility created by concerns of rising national coronavirus case numbers. While the continued market rebound during the month was certainly welcome for investors, very real risks to markets still remain—and there are several key factors that matter when determining the overall risk level.

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!

Last week was relatively quiet on the economic update front, with only three major data releases. The highlight of the week was the ISM Nonmanufacturing index, which showed that service sector confidence rebounded by far more than expected in June. This week, we’ll get numerous important updates, with a focus on consumer inflation, industrial production, retail sales, housing, and consumer confidence.

Today, I'd like to provide an update on the coronavirus, including the economic and market implications. It was another bad week on the medical front. The viral outbreaks in several states continued to get worse, with some health care systems reaching capacity. Further, new cases at the national level broke 60,000 per day for the first time, and the daily spread rate reached 2 percent per day. Although the risks are rising, the affected states have started to impose the needed restrictive measures, and the public has begun to modify its behavior. As such, we can reasonably expect these outbreaks to peak and then decline in the next couple of weeks.