Keeping 2020 markets in perspective

Stay focused on goals from crisis to recovery

Webcast:

Year-end planning strategies

Bill Cass, CFP®, CPWA®, Director Wealth Management Programs at Putnam
Chris Hennessey, Lawyer and CPA, Putnam Business Advisory Group

Rising tide for sustainable investing

Katherine Collins, CFA, MTS, Head of Sustainable Investing, discusses the rise in interest in sustainable investing amid the ongoing pandemic.

How markets recover

Staying invested even when markets are volatile can serve investors well

History shows that some of the market's best days occur shortly after bad days. By staying fully invested over the past 15 years, you would have earned $18,060 more than someone who missed the market's 10 best days.

This example:

$10,000 invested in the S&P 500

(12/31/04–12/31/19)

Time, not timing (PDF)

Learn more:

The U.S. stock market has been resilient throughout its history. Stocks routinely recovered from short-term crisis events to move higher over longer time periods.

Focus on goals

Think about your objective

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Current income, capital preservation, and liquidity Putnam Government Money Market Fund (PGDXX)
Capital preservation and income Putnam Ultra Short Duration Income Fund (PSDTX)
Income Putnam Income Fund (PINCX)
Tax-exempt income Putnam Tax Exempt Income Fund (PTAEX)
Growth Putnam Growth Opportunities Fund (POGAX)
Sustainability Putnam Sustainable Leaders Fund (PNOPX)

PLANNING IDEAS FOR FINANCIAL PROFESSIONALS

Year-end planning ideas under the CARES Act

Year-end planning ideas under the CARES Act

As investors prepare for year-end planning, they may want to consider tax-smart strategies under the CARES Act.

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Retirement savings tax advantages may change under Democratic proposals

Retirement savings tax advantages may change under Democratic proposals

Some tax proposals introduced by the Democratic presidential campaign may cause changes to retirement savings accounts.

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Change in administration may mean tax changes

Change in administration may mean tax changes

With uncertainty around the upcoming elections, it is not clear what types of tax changes may be implemented under a new administration.

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Market Updates

Find recent news and portfolio manager insights

Year-end planning strategies

Year-end planning strategies

Bill Cass, CFP®, CPWA®, Director Wealth Management Programs at Putnam
Chris Hennessey, Lawyer and CPA, Putnam Business Advisory Group

Munis outpace Treasuries, taxable bonds

Munis outpace Treasuries, taxable bonds

The recovery in the municipal bond market continued in the third quarter as munis outpaced U.S. Treasuries and the broader taxable bond market.

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Post-election update on markets and taxes

Post-election update on markets and taxes

Chris Hennessey, Lawyer and CPA, Putnam Business Advisory Group
Chris Galipeau, Senior Investment Director
Bill Cass, CFP®, CPWA®, Director Wealth Management Programs at Putnam

Election clouds outlook for fiscal stimulus

Federal stimulus to support the recovery is likely after the election while uncertainty around taxes complicates the picture, explains Jason Vaillancourt, CFA, Co-Head of Global Asset Allocation.

2020: Not a typical recession

Shep Perkins, CFA, Chief Investment Officer, Equities, discusses the characteristics that distinguish this year’s recession from past periods.

The role of value investing post-election

The role of value investing post-election

Lauren DeMore, CFA, Portfolio Manager
Darren Jaroch, CFA, Co-Head of Global Asset Allocation
Jyotsana Wadera, Senior Investment Director, Equities

Municipal bond market showing resilience

Portfolio Manager Garrett Hamilton, CFA, explains how cash reserves, a strong housing market, and the Fed’s liquidity facility offset some of the revenue pressure on states.

Stock markets fall after President’s COVID test

Stocks tumbled after President Donald Trump tweeted October 2 that he and First Lady Melania Trump had tested positive for COVID-19. The S&P 500 fell 1.5% when trading began. White House officials said that the president was working while quarantined. History shows that markets bounce back in times of crisis. When President Dwight D. Eisenhower suffered a heart attack on September 23, 1955, stocks fell. After shedding 6.6% in a day, the S&P 500 rebounded. One month later, the S&P 500 added 0.1%, and gained 11.8% in a year.

Success with small caps

Bill Monroe, CFA, describes how he adapted his investment process to the health crisis and why he thinks small companies still offer big growth potential.

Washington to Wall Street pre-election update

Washington to Wall Street pre-election update

Bill Cass, CFP®, CPWA®, Director Wealth Management Programs at Putnam
Chris Hennessey, Lawyer and CPA, Putnam Business Advisory Group
Chris Galipeau, Senior Investment Director

Investing for the new decade

Investing for the new decade

Richard Bodzy, Portfolio Manager
Gregory McCullough, CFA, Portfolio Manager
Jyotsana Wadera, Senior Investment Director, Equities

Retail sales back to 2019 levels

Retail sales increased for a second straight month in July. In an advance estimate, the Census Bureau reported that retail sales rose 1.2% in July from June. What’s more, July retail sales were 2.7% higher than in July 2019, prior to the pandemic downturn. Retail and services sales together represent consumer spending, which accounts for about two thirds of GDP. In its second-quarter report, the Bureau of Economic Analysis found that consumer spending rose 5.6% in June, after climbing 8.4% in May.

Crisis worsens housing insecurity

As the nation debates future pandemic relief, data reveal significant housing insecurity. Nationally, 27% of all households missed their payment for July. Census Bureau reports showed that, among households that rent or pay a monthly mortgage, a higher rate of non-white households either missed their July rent or mortgage payment, or paid late (as of July 21). Disparities in income, savings, and cost burden were factors that may have led to late or missed housing payments, according to the Urban Institute (Wall Street Journal).

Black-owned businesses hit harder by pandemic

Pandemic lockdowns had a disproportionate impact on black-owned businesses, according to a New York Federal Reserve Bank study. As the disease raged from February through April, 22% of small businesses closed. Black-owned businesses shuttered at the highest rate, 41%. At the same time, 32% of Latinx businesses closed and Asian businesses saw a 26% decline, compared with 17% for white-owned businesses. The study cited several factors. More black-owned firms operated in areas with high levels of COVID-19. Also, the federal Paycheck Protection Program did not reach a significant number of minority businesses, due in part to relatively weaker ties to banks that administered the program.

Fixed income opportunities and uncertainty

Fixed income opportunities and uncertainty

Bill Kohli, Co-CIO, Putnam Fixed Income
Jo Anne Ferullo, CFA, Senior Investment Director

Gold rallies on uncertainty

The price of gold reached an all-time high in late July as investors kept a close eye on the debate over pandemic stimulus, rising coronavirus cases, and growing U.S.-China tensions. Gold jumped 2% to a spot price of $1,944.71 per ounce, surpassing its 2011 highs of 1,917.90 an ounce. Through July 27, gold was up 7% compared with June (Reuters, Marketwatch). Investors appeared to seek safe havens as the dollar has weakened and the Federal Reserve maintained short-term rates near zero. Silver followed suit recently and jumped more than 7% to $24.3993 an ounce — its highest since 2013.

Congress plans extending jobless benefits at lower rate

As initial pandemic relief measures expire July 31, Congress is considering an aid package to continue unemployment benefits at lower amounts. The Senate bill includes a $1,200 payment for individuals. It also cuts the supplemental unemployment benefit to $200 per week from the previous $600. After two months, a new formula would replace 70% of income. Also proposed is $190 billion in small business loans and $100 billion for seasonal businesses and those operating in low-income areas.

Opportunities in small-cap growth

Opportunities in small-cap growth

Bill Monroe, CFA, Portfolio Manager, Putnam Small Cap Growth Fund
Caroline Edwards, CFA, Senior Investment Director and Team Leader, Equities

Jobs increased in May

In a report that defied expectations, the United States regained 2.5 million jobs and the unemployment rate declined to 13.3% in May from 14.7% in April. The rise in employment represented workers resuming jobs on hold due to lockdowns to contain the coronavirus. The Bureau of Labor Statistics noted that employment rose in the leisure and hospitality, construction, education and health services, and retail trade sectors.

Constructing an all-weather glide path

Constructing an all-weather glide path

Brett Goldstein, CFA, Portfolio Manager, Global Asset Allocation
Brendan Murray, Senior Investment Director, Global Asset Allocation
Steven McKay, Head of Defined Contribution Investment Only

Companies suspend dividends to preserve cash

Hit by the economic downturn, many companies are suspending or reducing dividends. S&P Dow Jones Indices noted that dividend net changes for U.S. stocks declined $5.5 billion in Q1, marking the first quarterly drop since Q2 2009, and the worst since Q1 2009. The trend may continue. As of April 30, 19 S&P 500 companies increased second-quarter dividends, 12 decreased, and 12 suspended them. S&P 500 dividends totaled $485 billion last year. Dividend futures project this year’s total may be $415 billion, and it may take seven years for dividends to rebound to 2019 levels.

Will April rally continue in May?

U.S. equities posted double-digit gains for the month of April, with the S&P 500 rising 12.82% after declining 12.35% in March. Consecutive monthly moves of 10% or more in the S&P 500 have occurred only once before during the past 50 years. The April rally happened despite an historic drop in economic activity. Real GDP contracted 4.8% in the first quarter, according to an advance estimate by the Bureau of Economic Analysis.

Consumer confidence spirals down

As efforts to contain the coronavirus weighed on the economy, consumer confidence plummeted in March. Not surprising, a negative short-term outlook was the biggest drain on The Conference Board, University of Michigan, and Bloomberg indexes. Confidence could become a volatile indicator. The University of Michigan noted that consumers viewed the pandemic conditions as temporary, resulting in a less severe long-term outlook. Rapidly changing events, however, could test that view.

Volatility complicates earnings estimates

The economic shock of the coronavirus pandemic and policies to contain it has disrupted the outlook for corporate earnings. By March 31, bottom-up EPS estimates for the S&P 500 Index started trending down (see graph), S&P Dow Jones Indices reported. As of April 3, 104 S&P 500 companies have issued guidance.

Markets wrestle with policy versus the pandemic

Markets wrestle with policy versus the pandemic

We are looking for progress in public health and credit market indicators as policy responds to the economic shock surrounding the pandemic and efforts to contain it.

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Joblessness rises

Weekly jobless claims soared to 6.6 million as of March 28 — the highest level since tracking began in 1967. With 3.3 million claims in the previous week, the tally is close to 10 million since businesses closed in many states to help stop the spread of COVID-19. The March jobs report showed a drop of 701,000 jobs, with data collected before many business and school closures, the Bureau of Labor Statistics noted. The Congressional Budget Office expects the unemployment rate to exceed 10% in the second quarter.

An unprecedented quarter

The VIX Index surged 290% as markets reacted to the Covid-19 pandemic in the first three months of 2020. The 10-year Treasury Note yield reached all-time lows, closing at 0.54% on March 9. The Federal Reserve slashed the federal funds rate by 1.50% during March and pledged to purchase bonds and mortgage-backed securities in “the amounts needed” to support the markets. Initial jobless claims rose by 3 million to 3.2 million in the last report of the quarter as the economy began to adjust to the crisis.

Did the market turn bullish in late March?

On March 26, 2020, the Wall Street Journal reported that the Dow Jones Industrial Average “climbed 6.4%, putting the blue-chip index more than 20% above its recent low, a move that starts a new bull market and marks the shortest bear market in the index’s history.” However, the S&P 500 and Nasdaq indexes did not cross the 20% threshold. Some would argue a true bear market persists longer. You can see bull and bear markets that lasted four months or more in this illustration of how market rebounds last longer than declines.

Volatile markets have up days as well as down days

On March 24, 2020, the Dow Jones index jumped more than 11%, its biggest one-day rally since 1933. The Dow remains in bear market territory as the U.S. and global economies slow down in response to the COVID-19 pandemic.