The stock market finished mixed for the third quarter with the stocks of large US companies rising 1.2% while smaller US company stocks declined -3.5%. Foreign stocks were also lower by 1.4%, and US bonds were higher by 0.4%. Covid cases linked to the Delta variant increased over the summer, causing more consumers to stay closer to home. With less consumer spending, the pace of economic recovery in the US slowed over the quarter.
Unemployment in the US is still high by historical standards, measuring at 5.9% in June, well above the pre-pandemic rate of 3.5%. Economists have noted an anomaly in matching laid-off workers with available job opportunities as the economy continues its uneven reopening process.
The stock market moved generally higher during the second quarter, although we saw a fairly sharp diversion between the results of domestic large company stocks and smaller company stocks. For the quarter, large US stocks were up 8.5%, small US stocks were up 4.3%, and foreign stocks were up 5.2%. Bonds rebounded from first quarter losses, rising 1.8% for the second quarter.
On December 14, as a year of staggering loss was coming to a close, Covid-19 vaccine distribution began in the United States. As of this writing, more than 124 million people have received the vaccine, while 46 million people (more than 14% of the total US population) are fully vaccinated. The accelerating pace of vaccination is good news from a public health perspective, a welcome harbinger for the many households that have suffered financially during the pandemic, and critical to the economic recovery of the nation.
For the first quarter, large company stocks in the US rose 6.2%, smaller company stocks were up 12.7%, foreign stocks were higher by 3.5%, and US bonds (broadly measured) were down -3.4%. As vaccination rates grew, business restrictions relaxed and employment forecasts brightened. Optimism about the US economy grew during the first quarter, helping to support the markets. Over the last year, market growth
Investment advisors who have practiced socially responsible investing (SRI) going back decades as some on our team at Natural Investments have, remember well the doubters’ refrains of our means for social and environmental change: using investment capital does not advance social progress and environmental preservation. There is now evidence to refute them.
One way socially responsible investors create impact is by identifying which companies are exhibiting objectionable practices that undermine social progress or create environmental harm, and will decide to withhold financial backing from such companies. This is known as “avoidance” investing, one of several SRI leverage methods.
The three major events of the year—the coronavirus pandemic, racial unrest, and a contentious presidential election— combined to present an environment that we could scarcely have imagined twelve months ago. There has been plenty of fallout from these events, including the heartbreak over lives lost, economic hardship, a painful confrontation with systemic racism, and the thorough disruption of communities and local economies.
As of this writing, more than 78 million cases of COVID-19 have been confirmed worldwide, and more than 1.7 million deaths have been attributed to the pandemic—numbers that continue to rage out of control. These are losses that overwhelm the mind. The enduring legacy of the pandemic will be the massive void left by those who have died.
In spite of heightened volatility in stocks as the quarter drew to a close, the markets generally moved higher over the period. For the quarter, US large company stocks rose 8.9%, smaller company US stocks were up 4.9%, foreign stocks were higher by 4.8%, and US bonds, broadly measured, were up 0.6%. While stock indexes were higher for the quarter, the markets were mixed, with small company and foreign stocks having lost value, while large company stocks have moved higher.
Socially responsible investing has gone mainstream, if you haven’t heard. Recent reports show that the total amount of professionally managed money invested with social and or environmental criteria has topped $11 trillion. This hasn’t gone unnoticed by a myriad of large and small investment companies and advisors. It is now more important than ever for committed conscientious investors to understand the various shades of socially responsible investment options in the marketplace. Much of what passes for environmental, social and governance (ESG) investments end up as merely a fund of typical companies which have been run through a screener to weed out the worst of them, known as “avoidance investing,” and their work is done. That’s it, pretty thin soup for investors aspiring to improve the world.
As we concluded the first full quarter of economic fallout from the coronavirus pandemic, stock values were generally higher, with large company stocks up 20.5%, smaller company stocks up 25.4%, and foreign stocks up 14.9%. Bonds, broadly measured, rose by 2.9%. These returns have an impressive luster in part because they are measured relative to the market trough of late March. Overall stocks remain lower for the year.
In January, The National Oceanic and Atmospheric Administration (NOAA) reported that 2019 was the second hottest year on record, following closely behind 2016. The planet’s five warmest years have all occurred since 2015, and nine of the ten warmest years have occurred since 2005.
There is now overwhelming scientific consensus that CO2 emissions from fossil-fuels are a primary cause for our rising average global temperatures. The US Environmental Protection Agency (EPA) states, “Human activities are responsible for almost all of the increase in greenhouse gases in the atmosphere over the last 15 years.” The obvious remedy? A steep reduction of CO2 emissions.
Nowhere in any of the 2020 economic outlook reports was there any mention of a global pandemic, yet here we are. While journalists from sensible corners of the news media world have for years issued warnings about the health and economic risks of pandemics, the prospects for such an event seemed distant and abstract to most. The machinery of the global economy chugged on.
The novel corona virus outbreak began with a single known case on December 10 in Wuhan, China. By the month’s end, the new virus was identified by Chinese health officials. In mid-January, cases were being reported in other countries, and the virus began to spread rapidly. Throughout March, new infections and upsetting mortality reports issued by countries around the globe worsened as the days passed.
