Capital Perspectives July and August 2020


In the July/August issue of our monthly flagship publication, we feature:

  • On the Record by Chief Investment Officer Tony Roth, where he says the trajectory of COVID-19 will be the primary determining factor in what to expect for markets and the economy. With disease cases rising in parts of the country, rollbacks in reopenings could lead to a leveling off in economic data. One thing is for sure, he says: The virus is not going away any time soon and it will continue to exert a strong hold on the economy.  
  • In Focus by Chief Economist Luke Tilley explains why he believes there’s a stronger chance the Federal Reserve will undertake a policy called “yield curve control.” Learn what it means, the rationale for considering the strategy, as well as the potential risks and rewards.
  • Investment positioning and domestic equities asset class overview.


Never before in my career can I recall such a stark disconnect. There is a high degree of uncertainty among forecasters on the trajectory of the economy, while on the other hand, markets indicate a significant amount of optimism, as reflected in domestic equity valuations. It is tempting to join the fray and take a side, of those arguing adamantly based on either the economic (bear) or market (bull) case. In point of fact, now is not the moment to be making bold calls and taking potentially reckless bets. Nobody knows how our public health care or political landscapes will look at year end. Accordingly, now is patently a time for patient discipline and risk management. We maintain a slight underweight to risk with a focus on diversification, quality, and organic growth.

At this point, the crisis in the United States and around the world remains, at its root, a health-related one, and we are monitoring data around the virus very carefully. The situation is complex.

Cases are rising in parts of the country that, until now, had not yet been dramatically impacted by the virus but continue to decline in the earliest and hardest-hit states. A portion of the increase in cases is attributable to much higher levels of testing, roughly 2.5 times the testing available in April and early May. However, in recent weeks, states like Arizona, Florida, and Texas are exhibiting much higher positive test rates, hospitalizations, and proof of contagion indicating an estimated effective

Additionally, of those testing positive and being hospitalized in recent weeks, reports indicate many more are younger (below the age of 65) than was the case earlier in the pandemic. While this likely means a short-term drop in the COVID-19 mortality rate, it is also possible that milder or asymptomatic cases from younger individuals will lead to increased spreading to more vulnerable cohorts of the population. We then layer on the clinical progress made in therapeutic and hospital treatment, which is contributing to lower death rates, and there is even less visibility on the future path of the health crisis, so we need to rely on instruments, lest we fly blind.



Please see important disclosures at the end of the article.

Download Article

Tony Roth


Discover perspectives on timely wealth and investment management topics, authored by subject matter experts.

Explore Articles