Finding Glimmers of Light in Darkness

April 15, 2020 · Written By J. Stephen Lee

In 1650, English theologian Thomas Fuller penned a travelogue about Palestine, and is credited with the first printing of the phrase “It is always darkest just before the day dawneth.

Reflecting back on the last six weeks, this seems an appropriate description of our shared Coronavirus/COVID-19 experiences. In the midst of unrelenting waves of frightening headlines and grim statistics, a subtle and easily overlooked shift has been occurring. While each day we see virus case numbers still climbing, the dialogue increasingly focuses on forward-looking “re-entry” of workers and businesses, as leaders speak of plans to “re-open economies.” Stock markets have rebounded significantly off of their March panic-driven lows.

As we noted in an earlier commentary, the behavior of markets continues to confound many. While the immediate COVID-19 toll remains high, there are signs of plateauing, and last week saw the S&P 500 gain 12% — its strongest week since 1974. From its March lows, the S&P 500 has rebounded over 25%. Investors who succumbed to fear and sold equities are left scratching their heads. And in credit markets, following large-scale relief measures by the Federal Reserve, they too remain in revival mode, with liquidity once again flowing and high demand leading to the 10-year Treasury yield dipping back well below 1% to (at this writing) 0.74%.

But these recent positive signs do not change the fact that the first quarter ending March 31 was abysmal for stocks — the S&P 500 declined over 20%, small U.S. companies fell over 30%, and both developed international and emerging market stocks declined approximately 23%. Looking ahead, much still remains fluid. First quarter earnings are just beginning to be reported, jobless data is far from improving, and global economies have all likely entered official recession territory. Large market swings will almost certainly continue to occur.

Headlines continue to be made by U.S. job losses — particularly for small and midsize businesses. Claims for unemployment have skyrocketed, with the leisure and hospitality sectors feeling the worst of the pain. In three weeks, some 16 million have filed for unemployment. Clearly, the pain is not over and will only begin to lessen as businesses are carefully reopened. That is (at best) several weeks away, and will no doubt be a halting process. Expectations of a second round of cases as social distancing guidelines are eased should be heeded, and temper hopes for an immediate “V-Shaped” economic recovery.

This scenario is playing out in China, as data reveals the first signs of a fitful return to economic normalcy. Their Purchasing Managers Index (PMI) has now rebounded above 50, indicating economic expansion and confirming that economies will indeed bounce back. But accompanying that is a small increase in new cases, lending credence to the fact that the virus will remain an ongoing concern even as economies recover. Similarly in Europe, countries are also carefully returning workers to select businesses. While this is clearly good news, GDP forecasts across the globe have been negatively impacted, and while economists differ, most coalesce around a severe contraction in the first half of the year with a slow recovery beginning later this fall.

Human beings crave certainty, something that is all but absent in the uncharted waters we find ourselves in today. We have read many thoughtful observations in the past month or so, some focused solely on economies and markets and some focused on the societal, emotional, and psychological ramifications of a pandemic. Tracing through each is a uniquely human trait that helps us to persevere — hope. While not being naïve, we believe that hope is appropriate and necessary.

In the history of markets is hope — based on fact, not conjecture — which reveals that financial markets always recover from disruption and move on to new and higher levels. And in the many stories we have all witnessed regarding the strength of the human spirit, the daily acts of compassion and bravery here in the U.S. and across the globe, hope similarly shines as a force to allow forging ahead in spite of bleakness. Hope in no way seeks to diminish the pain and tragedy being felt by so many in this crisis, nor does hope excuse us from empathy and doing our part to help where we can, in ways small or large. Rather, in the midst of darkness, hope allows for all of us to look ahead and see, that as Thomas Fuller noted and as an Irish version eloquently states, “Remember, that the darkest hour of all is the hour before day.

Spring is a time of nature’s reawakening, as dormancy bursts into growth and the tantalizing signs of the coming summer begin to creep into colder northern climes. Beyond the turn of seasons, these weeks just past and just ahead mark high holy days for many of the world’s largest faiths, focusing on the renewal and hope inherent in belief in a power beyond ourselves. While it may be hard amidst the current pandemic to feel a sense of renewal or a sense of hope, we hope that this communication finds each of you managing as well as can be expected in this time of uncertainty, and we further wish each of you confidence in the future that, as a nation and a people, we will persevere through this crisis.

When our team launched ourselves into a new way of working as a result of the mandated closures four weeks ago, we knew we would learn along the way and find spots for improvement. Through open and direct dialogue with our clients, we’ve been able to identify areas of opportunity to enhance our service to you. We want to always be improving, so we encourage all of you to continue providing such essential and valuable feedback.

In closing, we want to add our thanks to the chorus of gratitude being expressed to healthcare workers and so many others working hard to keep our needs supplied. These are the quiet and brave heroes of this time — rising daily to enter a world and work in ways visible but also unseen, while so many of us shelter in place, operating from the relative safety of our homes. They are owed our deep thanks.

On behalf of all of us at JFS, thank you for the continued confidence. It is our privilege to work with you, and we have been gratified by so many kind conversations and expressions of concern from so many of you. We are here, striving every day to meet your needs, and look forward to continuing to do so.


Your advisory team is here to address your specific needs and remains ready, willing, and able to help any of your friends or family in this unusual and challenging environment. We encourage you to forward this to a family member, friend, or colleague you believe would find the information helpful and talk with your advisor about the best way to connect us, so that they can get the help they need. During times like this, great advice adds value by preventing financial mistakes and taking advantage of opportunities that can impact a lifetime of goals.