Front-line health care workers battling the pandemic


A significant storm blew through, and caused a lot of damage. But now the sky has cleared a bit and the tide surge has receded. Some think it’s safe to wander out onto the sand, lay down a towel, put up an umbrella and cast aside any worry about what may happen next. But will the sea remain calm, or are menacing waves approaching from beyond the horizon? … We won’t know for several weeks.

After many weeks of tight restrictions on activity to confront the novel coronavirus, 41 states are beginning to re-open. The other nine are expected to follow soon. They are being strongly encouraged to “get back to work” by President Trump.

It has become apparent that the process will not be as consistent, uniform or coordinated as health authorities advised. In fact, several states are not following the White House’s Guideline for Opening Up America Again. However, the President made it clear a few weeks ago that the federal government would defer to governors and allow them to determine when and how their states would re-open.

COVID-19 Numbers
Globally, across 187 countries, there have been over 3.6 million confirmed cases and over 258,000 deaths. In the US, over 1.2 million have been infected and over 71,000 have perished.

White House Coronavirus Task Force
Vice President Pence announced yesterday that the White House Coronavirus Task Force will likely be disbanded at the end of the month, or in early June. The daily briefings ended over a week ago. The timing is interesting, because health experts continue be very concerned about a resurgence of the pathogen, as the nation begins to re-open.

Round Four
There will likely be yet another round – the fourth – of funding for economic relief from the impact of the pandemic. The discussions over this package have grown increasingly partisan. Democrats want emergency relief for states, counties and cities which experienced both a dramatic drop in revenue and a spike in spending. Republicans want to shield employers from liability associated with claims that workers who contract the virus may make against them. The Trump Administration wants a massive stimulus package to rebuild roads, bridges and other infrastructure. It will probably take longer to reach consensus on any additional spending that it did for the first three tranches.

Deficit and Debt
Who is paying for all of this spending? We are, and we are borrowing to do it. Congress authorized $3.5 trillion in spending in 5 weeks. The Committee for a Responsible Federal Budget reports that, as a percentage of gross national product (GDP), Congress spent approximately the same amount over five years during and after the Great Recession.

The US government will borrow $4.5 trillion to cover the giant deficit that has resulted from a drop in federal revenue and a jump in spending. The Congressional Budget Office (CBO) projects that the annual deficit will be 18% of GDP. The national debt will be 101% of GDP. The last time the country’s deficit and debt were so large was at the end of World War II.

The Markets
The Dow Jones Industrial Average ended yesterday up 133 points, or 0.56%. The S&P 500 Index rose 26 points, or 0.90%. The S&P 500 Index was down 34% in the period February 19 to March 23. It remains down 12% for the year.

You may not have noticed, and it may not feel like it, but the stock market is actually in a “bull market.” The “bear market” that preceded it lasted 11 days. The bull market that began on March 10, 2009 lasted nearly 11 years.

We remain skeptical of current stock market values. As we’ve discussed, the price of a company’s stock is based on expected future earnings. We believe that projecting future earnings has never been more challenging than in the midst of COVID-19. We’re not alone. The estimates of corporate earnings have never been as widely dispersed as they are currently. FactSet projects that earnings for the first quarter of 2020 among companies that comprise the S&P 500 Index will fall 13.7% compared to the same period last year. This would be the largest quarterly earnings decline since the third quarter of 2009. FactSet predicts that profits for the companies in the Index will fall by 18% in 2020.

Widespread Anxiety
NPR’s Marketplace reported yesterday that its Marketplace Edison Research Economic Anxiety Index poll found that nearly 54% of US homeowners worry about being able to pay their mortgages, and 62% of renters worry about paying their rent. Nearly 44% of Americans worry about paying for groceries. Nearly a third are losing sleep over their financial circumstances.

These are trying times. The novel coronavirus is taking a toll in many ways. It is vitally important that, in addition to protecting our physical health, we maintain good mental health.

One of the best ways to respond to difficult circumstances is to adopt a positive mental attitude. Doing so boosts your psychological immune system. The result is less stress hormones and reduced cellular aging. In other words, you’ll feel better.

An easy way to shift from negative thoughts to positive ones is to simply think about things for which you’re grateful. We live in the United States, one of the wealthiest nations on the planet. We’re living in an age of unprecedented abundance. So, despite the pandemic, there is much for which we can (and should) be grateful.

You might consider taking a few minutes each day, perhaps early in the morning after you wake or before you go to bed, to reflect on the things for which you’re grateful. Some people keep a gratitude journal for this.

We’ll wrap up today’s correspondence from Springwater, with three things for which we are grateful:

  1. You, our clients. We greatly value your trust and confidence.
  2. Technology, which allows us to serve you from anywhere we can access the internet with our laptop computers or mobile devices.
  3. Our front-line health care providers, who are caring for those infected with the virus.

Springwater’s Correspondence
Just a reminder that beginning May 1, we transitioned to writing every other weekday (Monday, Wednesday and Friday). We plan to keep this schedule until the end of the month, at which point we’ll evaluate again. As always, we welcome your questions and comments.

Keep the faith, be safe and stay healthy.

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