Happy Monday to everyone.
Well, enough time has passed and now Affinity has been exposed to Covid19. Sooner or later it was bound to happen. As careful as we are in the office and in our personal lives, the odds increase over time that one of us would get it. A spouse of an Affinity employee got diagnosed positive. Then the spouse (our employee) got it. This all happened at the end of last week. Most of us have been tested this weekend, with the rest being tested today. This employee will be working from home while in quarantine. Some have already gotten their results, and were negative thankfully. Our employee and their spouse described their symptoms to be more like a cold or allergies and nothing serious, thank goodness. We will keep that employee and their spouse in our thoughts and prayers.

The market has picked up with level of intensity of ups and downs as we predicted it would as we get closer to debates.

Negatives on the radar ahead of us:

  1. Any negative news on economics including jobs
  2. Election debates tend to be nasty
  3. Election commercials tend to be nasty
  4. Biden wins election (only saying this, as a change in President is change, and the stock market does NOT like change) (Biden can be the next best President, but he has his own ideas and agendas, thus causing change)
  5. Democrats take over the Senate while President Trump wins his election. (Democrats already tried to impeach him once at the House of Representatives level-it never made it to the Senate which is controlled by Republicans) (if Democrats take over all of Congress, then they will likely try to impeach him again-thus causing more change).
  6. Any problems with Covid19 vaccine (delays, unknowns, etc…)
  7. Double digit unemployment (if vaccine comes out, and lots of Americans try to go back to work, there are many companies that went under during this time, and there will be more people looking for jobs than there are jobs for them. This will potentially cause the wages to go down as companies can hire cheaper as there will be lots of candidates looking for the same positions.
  8. The next stimulus (not in place yet) runs out and no additional stimulus after that.
  9. Federal Reserve at 0%-0.25% interest rates. Interest rates will eventually start to go up
  10. Inflation going up

We have more downside market potential than upside. President Trump will do everything he can to make things look good so that we feel good. While Biden will try to make things look bad so that we feel bad, which in return makes people want to elect him in hopes he will turn it all around. As if this year isn’t difficult enough with Covid19, we add on that this is an election year. So that adds to the level of uncertainty ahead of us. Please do not take any of these political comments to be negative. I am not trying to say good or bad things about either party or candidate. This is the game of politics and both parties would do the same if the roles were reversed.

I have been asked over the last week, what is our next move with the models? Great question. If the market drops enough, we will buy an additional 20% stocks. If the market goes up enough, we will see the 20% stocks we have now and lock in those gains. It all depends on what the market does, and information we get causing that to give us a direction for the next step. We certainly don’t want to “day trade” but we will take advantages of things when it is timely and prudent.


Performance DJIA:
Mon 9/14 +1.18%
Tues 9/15 +0.01%
Wed 9/16 +0.13%
Thurs 9/17 -0.47%
Fri 9/18 -0.88%

Last week -0.03%
Since 2/19 market high -5.76%


Tid Bits:

9/7/20 / From an interview with Bob Rodriguez, former portfolio manager and managing partner at FPA. He was the only fund manager in the United States to win the Morningstar Manager of the Year award for both and equity and a fixed income fund.

“What the Fed threw at the system was emergency stabilization. In light of these actions, the economy remains in a quite tenuous position. In fact, I’ve used a phrase with my former colleagues and friends – we are in a form of “rolling depression.” We’re not in a recession. Most people don’t know the difference between recession and depression, other than saying, “a depression is worse than a recession.” A depression occurs when there is a structural shift downwards in the economy, and it stays near this lower level of economic activity for a prolonged period of time.”

With that in mind, the policies that are being enacted by the Fed and the federal government are going down the same road as in Japan and Europe. Thus, I fully expect a similar outcome of low rates, languid economic performance and high unemployment for a sustained period. After the great recession of 2008-2009, I forecast that we would see real GDP growth of 2% for as far as the eye could see. Well, from June 30, 2009 through September 30, 2019, real GDP grew about 2.2%. I wasn’t far off. We also had terrible capital spending and productivity cycles. Thus, coming out of this mess that we are in, I fully expect economic growth will be probably be no better than half of what we experienced after the great financial crisis, despite the President’s saying we are in a V-shaped recovery. I’m looking for 1% or lower real GDP growth going forward, accompanied by poor rates of capital spending and productivity growth.

We’re in an even bigger bubble than what transpired before this year. Who could envision that Apple’s market cap could be greater than the entire Russell 2000? I know I couldn’t. The concentration of performance is in a very small segment of the top portion of the market. It’s even more distorted than what occurred at the end of the 1999-2000 bubble. I don’t consider that good. I fully expect negative real returns for equities over the next decade. The other question is whether nominal returns will be positive? That’s a function of inflation, which might happen.

August Employment Report, By Scott Brown of Raymond James / 09/10/20

Private–sector payrolls rose by 1.027 million in the initial estimate for August. Normally, such a gain would be considered outstanding. However, in this recovery, that comes as a disappointment. The increase in jobs leaves us well short of where we were before the pandemic, and the pace of improvement appears to have slowed. In contrast to the establishment survey, the household survey showed significant improvement in August. However, the payroll data should be granted more weight. In the last four months, private-sector payrolls have recovered about half of the jobs lost in March and April. Motion picture and sound recording payrolls are half of what they were in February. Payrolls in performing arts and spectator sports remain down 46%. Restaurants and bars have added 3.6 million jobs since April, but were down 6.1 million between February and April. A full recovery in these badly hit sectors isn’t going to occur until the pandemic is well behinds us, which won’t be anytime soon. It’s important to note that the reported unemployment rate understates the degree of labor market weakness in tough times. Over eight million people exited the labor force in March and April. The job outlook is important because jobs drive consumer spending, which accounts for 70% for Gross Domestic Product. The sectors exhibiting prolonged weakness in jobs are generally lower-paying industries, but for the households experiencing job losses, the consequences are dire. Many of these jobs are not expected to come back. The reallocation of workers over time is a difficult and painful process. Two hundred years ago, most jobs were in agriculture. After World War II, about a third of jobs were in manufacturing. It’s unclear what lies ahead, but the great success of the U.S. economy has long been its ability to reinvent itself.

Global banks are tanking over allegations of a money-laundering scandal, second-wave COVID-19 worries, and a possible delay to badly needed fiscal stimulus in the U.S., due to political tussling after the death of Supreme Court Justice Ruth Bader Ginsburg.

*Deutsche Bank analyst Peter Hooper: “As Q3 draws to a close, we estimate that the level of global gross domestic product is about halfway back to its pre-virus level, and we now see that journey being completed by the middle of next year, a couple of quarters sooner than our previous forecast,” said a team led by Peter Hooper, global head of economic research, in the bank’s just-released World Outlook Update.

Hooper expects the pace of the recovery will slow as the virus spreads through the winter months, especially barring a U.S. fiscal package before the election. But once summer comes, the team anticipates widespread vaccinations beginning, which will help herd immunity take hold and speed up the recovery.
Hooper expects the virus will leave lasting scars though, such as a permanent hit to the hospitality industry and automation taking jobs away forever, meaning the full recovery of the economy to before COVID-19 may never happen.

Outside of the negatives mentioned above, the Deutsche Bank strategists also see a looming financial crisis, tipped by a “growing overvaluation of assets and mounting debt levels,” and driven by the massive fiscal and monetary policy stimulus efforts.

Financial crises have often been touched off in the past under such conditions by the inevitable shift from policy ease to policy tightening, which is likely still at least several years away, but could surprise sooner,” said Hooper and the team


Global 31,280,603 cases ; 965,668 deaths
US 7,005,686 cases 204,122 deaths (+2.81%, +5,580 increase from last week)
KS 53,427 cases 597 deaths
MO 115,370 cases 1,950 deaths

Highlights from analysts and economics

From JP Morgan
Weekly Market Recap
August retail sales rose by 0.6% relative to July, marking the slowest monthly increase since sales troughed in April, when most of the economy was shut down to stop the spread of COVID-19. Sales in sectors such as groceries and non-store retail (which is primarily composed of online retailers) were boosted by stay-at-home restrictions and are above pre-pandemic levels. By contrast, while sales in restaurants and bars rose a strong 4.7% last month, reflecting a gradual resumption of their activities, they remained below levels seen in February. This suggests that the services sector is still under pressure from social distancing behavior. On a year-over-year basis, retail sales are up by 2.6%, but momentum slowed in August, coinciding with the expiration of the $600 extra weekly unemployment payments. While consumer spending on goods should continue to look healthy in the months ahead, services spending will likely remain depressed until we see the widespread distribution of a vaccine. This should contribute to a general slowing of the economic recovery, suggesting that long-term investors should continue to focus on portfolio diversification.

Weekly Strategy Report
From a portfolio perspective, exposure to tech winners in U.S. equities is not a free lunch. The same growth stories that prompted outsize U.S. equity returns in recent years and a faster recovery from the COVID-19 shock make the U.S. a higher volatility, higher beta market, at least for now.
The shift is a symptom of rising market concentration, which reflects the potentially powerful influences of investor crowding, swings in sentiment and high valuations, along with business fundamentals.

We still score U.S. equities as an overweight, and like its tech exposure in combination with cyclical equity markets including emerging markets and Europe.
Given the S&P 500’s reduced defensiveness, and the fact that bond yields are pinned down by monetary policy, it has become more difficult to find effective portfolio hedges.

From Blackrock

We expect annual growth in the U.S. consumer price index (CPI) to average in the range of 2.5% to 3% between 2025 and 2030. This is broadly consistent with inflation moderately above the Fed’s 2% target (CPI inflation tends to run above the Fed’s preferred gauge based on the personal consumption expenditures, or PCE, price index), and a jump from current market-implied inflation. Rising global production costs are the trigger. The Covid-19 shock is driving up costs in contact-intensive services, and could speed up de-globalization and the remapping of supply chains for greater resilience against a range of potential shocks. Less offshoring could give domestic workers more bargaining power on wages, especially in places where the political pendulum is swinging toward addressing inequality. So-called superstar companies – many in the tech sector – could gain greater ability to pass on higher production costs to customers, having achieved dominant market shares.

***Open enrollment for Medicare is coming up. Here is a referral for you…
As an independent insurance agent that contracts with major carriers, I can help you decide which plan is right for YOU! Whether you are in the market for Medicare Supplements, Prescription Drug Plans, Advantage Plans, or just want to know your options, I can guide you through the process.







Community Café is Wednesday, September 23 at 8:00am for 30 minutes. Topic will be on: Do Masks Work? “All Things COVID”

  • Will live stream on Facebook Live anyone who is friends with me on Facebook or Click Here to Follow The Community Café Facebook Page
  • Invitations will go out via email with a link to join on zoom.us, plus those who are friends with me on Facebook
  • Speaker this week, Glenn Stockton of Stockton & Stern Law with special guest Mike Jensen Chief Strategy Officer of Olathe Health System
  • Invitations will go out via email with a link to join on zoom.com, plus those who are friends with me on Facebook

Estate Planning Webinar Monday September 28 at 6:00pm & Tuesday September 29 at 12:00pm

Social Security and Tax Strategy Webinar on Tuesday September 29 at 6:00pm and Wednesday September 30 at 12:00pm

Don’t forget that the news creates drama. The stock market moves for 2 reasons which are greed and fear.
Any service work you would like us to do for you, please email your request to us.

Please feel free to share this email with anyone you know, as the best way to battle stock market anxiety is education.

Thank you for your time in reading these updates.

Stay safe and stay healthy,
Mark Roberts