Updates, Tips, & Finance News

Hi there—here is this week's update!

TL;DR - Too Long Didn't Read

-GDP had a historic drop
-US consumers are losing confidence
-There is a negative feedback loop happening with consumption behavior


New cases accelerated for the sixth week in a row.

This week alone, there were four straight days of 1000+ deaths, with 1400 deaths on Wednesday surpassing the highest single day tally in more than two months.


The GDP is the total value of the goods and services in America.

2nd Quarter GDP figures were released, showing the largest drop on record since quarterly data started being tracked in 1947. GDP provides important insights into the general health and growth of our economy.

About 2/3rds of GDP is derived from consumer spending alone, a metric which also slumped the most on record, by 34.6% to be exact.

Consumer Confidence

The US consumer is losing confidence.

July’s Consumer Confidence Index decreased, with the largest detractors coming from Michigan, Florida, Texas, and California. The same states with surges in COVID-19 cases.

Only 31.6% of consumers expect business conditions to improve over the next six months.

Labor Market

After consistently decreasing for the last three months, the number of Americans filing for unemployment benefits increased for the second straight week.

For perspective, the 1.43 million claims equates to more than double the amount of claims filed during the worst week of the 2007-2009 financial crisis.

As touched on in prior updates, this does not include the 900,000 applications for Pandemic Unemployment Assistance, which extends aid to those who do not qualify for unemployment benefits. This ultimately makes the labor market situation worse than what is being reported on paper.


There is a negative feedback loop happening right now:

  1. COVID-19 resurgence affecting consumer confidence and consumption behavior.
  2. Rising unemployment from states reversing their reopening plans and companies downsizing or going out of business.
  3. Consumers are facing an income squeeze from pay cuts, layoffs spreading to larger corporations, and soon to be expiring government aid as we covered back on July 18th. With less to spend, consumer confidence and consumption behavior is affected and the whole loop starts over again.

We may see some volatility this month, as August is a notoriously bad month for the markets. The risk of congress not agreeing on a stimulus bill is looming, and may initiate a market sell-off.

Fitch just downgraded the US outlook from Stable to Negative, and some of the biggest names in tech didn’t offer the most encouraging outlooks. Big Tech’s earnings weren’t great, just better than their already lowered projections.

The sugar high from government stimulus may be wearing off, and we need to rely on our government to act in order to avert continued economic disaster.

Simply put, we maintain our view that we are in a bear market rally as economic data continues to stall-out.

See you next week,
-Saul & The Round Team

Have $100,000 or more to invest? You may qualify for Round Private Client. Contact our team at privateclient@investround.com.

Round Investments LLC, dba Round, is an SEC registered investment advisor. Securities offered through Apex Clearing Corporation, Member FINRA, SIPC. The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person. Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Forecasts or projections of investment outcomes in investment plans are estimates only, based upon numerous assumptions about future capital markets returns and economic factors. As estimates, they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time. The opinions expressed by Round represent the current, good faith views of Round and are provided for limited purposes, are not definitive investment advice and should not be relied upon as such. The stock market is in reference to the S&P 500 index. An index is unmanaged, does not reflect management or trading fees, and one cannot invest directly in an index. Stock market performance is in reference to the SPX Index and was provided by Bloomberg Terminal. To view Round's Brochure, Terms of Use, Privacy Policy, and Disclosures go to www.investround.com