The monetary and fiscal stimulus packages that began last spring effectively halted the meltdown taking place in the economy and in the financial markets. The markets revived quickly as they always do when money is being pumped into the economy, but in the economy, the stimulus could at most mitigate in some degree the paralysis that was taking place from the effects of efforts to contain the epidemic.

Those efforts generally succeeded and bought us some time to supply our medical system with PPE and testing capability. The economy also largely survived the state-by-state scattershot approach to various lockdowns and is poised for future growth in the form of pent-up consumer demand. Although given this haphazard approach, the epidemic is returning yet again in another wave of infections further delaying a full economic recovery. The Federal Reserve has deployed

its full arsenal and is literally pleading with Congress for more fiscal stimulus to weather the now prolonged epidemic. So far, the Senate Republicans do not have consensus and hence cannot pass further stimulus without Democrat votes.

Although many parts of the economy such as construction and home building have recovered and are growing, the biggest risk to the economy and the markets remains the course of the epidemic as it continues to ebb and flow unpredictably and is constantly challenging the effectiveness of our response and/or our willingness to continue to confront it.

The silver lining in this pandemic is that our global body of scientific knowledge specifically of viruses and generally of immunology is growing at light speed as we research testing, treatments, infections, spread, transmission, vaccine design, and immune response. A mere months ago ventilators were deemed critical for severe cases, but death rates have declined as ventilator use also has declined in favor of advanced mitigation of symptoms and better management of the immune response to acute infection. More than 240 vaccines are currently in development or trials, some under entirely new approaches and vectors to immune response systems and/or treatments. The knowledge gained from the massive global investment will be invaluable for our treatment of viral disease in general and in ways we can’t comprehend at present but will likely advance our knowledge of many “incurable” diseases.

We remain cautious, vigilant and patient, at least until a more clear picture emerges, as the old economic rules and measures are quite simply attuned to a pre-pandemic world and environment. Please also remember that because these quarterly thumbnail sketches are very brief, do not hesitate to call me if you wish to discuss your account or our outlook in greater detail.

Very Best Regards,

Joseph L. Toronto, CFA

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