Ann Sterling:
It is now time for 4 Your Money. We are joined by David Nelson, CEO of NelsonCorp Wealth Management. And we welcome you back, David.
David Nelson:
Thank you very much. I appreciate, Ann.
Ann Sterling:
Let’s get right into it because as states and municipalities across the country continue down the path of reopening their economies, we are seeing data on new virus cases that could put the reopening at risk. What has been the reaction of the financial markets with this?
David Nelson:
So, the market to date is kind of acting the last several months as far as the pandemic doesn’t even exist, it’s just been kind of strange, pretty much largely ignored. And I brought along the chart, I think my first chart that I brought, I think will help folks as far as have a little better understanding. So, we’ve got the two different clips here. So, the top clip is looking at the S&P 500 and that is in blue and then the bottom clip is going to be in a red. And what we’re looking at here is the top clip is the S&P 500 and the bottom one is looking at the Covid-19, basically the recorded individuals that have it and the new cases.
David Nelson:
And so, what we see is kind of a chart here and we put in the yellow lines to try to illustrate it and make it a little clearer to folks. But as Covid-19 cases have gone up, what you see is the S&P 500 market has gone down and vice versa. And so, it’s a very important variable as far as that’s taken place, as far as in this area. And again, we think this is going to continue for quite some time.
Ann Sterling:
That’s encouraging. A lot of data there regarding tracking Covid-19 and also the economy can have notable lags. So, are there ways for investors to try and keep up with this?
David Nelson:
Yeah. So, most of the data that individuals would typically look at is kind of rear view looking. In other words, the GDP, looking at employment, looking at retail sales. And so, what we brought along today, the second chart that we have is going to illustrate to people something relatively new and that is looking at mobility. So, this is coming from Apple and it’s looking at people basically standing to try to figure out as far as I want to drive to such and such a location. So, the top clip is looking at the driving aspect and on the left hand side of the chart, pretty high numbers then it plummets and now it’s starting to recover a little bit. What that illustrate is on a global basis, that people are willing to get back in the car and drive.
David Nelson:
Clip two is looking at mass transit. So, this is getting on the bus, getting on the train. And you see here a high number that turns into a very low number, really hasn’t moved hardly at all. And then the last one is looking at walking. So, people pulling up, trying to get directions, they’re going to walk. And what we see there is that one has improved pretty remarkably as well from the low levels, meaning, that individuals are willing to get out and walk. So, what it’s telling us is that people haven’t bought into the idea that they can’t get sick in this mass transit is probably going to be a long time as far as before we see some change there.
Ann Sterling:
It’s interesting to see it on this graphic that you’re showing us right now. So, let’s talk about it because we are hearing across the country that Covid cases continue. So, what are the financial implications viewers could be facing if the trend of these new cases continues to go up, not maybe so much locally but across the country, certainly it’s happening, David?
David Nelson:
Yeah, it’s a really good question. And what we find is that again, from the standpoint of looking at investment opportunities, which is what we’re focusing on, we think the path that has been the path of least resistance last several months, we’ll probably continue. The short answer to looking at the situation is things aren’t necessarily great but there are some opportunities.
David Nelson:
So, our view is this, is that we’re basically telling individuals to think that people are going to get on planes in a big scale, they’re going to go mass transit on a big scale, it’s probably not going to happen. We would tell people, “Focus on Mega Cap Growth, internet and cloud-based opportunities that are out there and the fed is going to continue to print money.” So, that basically implies that high-quality bonds are probably going to be very favorable for quite some time.
Ann Sterling:
Keep looking for the opportunities. David Nelson, thank you for joining us. And if you missed any of this discussion, we will make it available for you right there on our website, ourquadcities.com.