THE SPOKE • AUGUST 13, 2020 (Aug 13, 2020)

Invocation: Toni Harper

Flag Salute: Michelle Chantry

No Guests or Visiting Rotarians

Good News & Announcements:

A new Paul Harris Fellow has been earned and awarded to Shawn Kennemer of BARC. Congratulations Shawn!

Girish Patel will be celebrating the 1 year anniversary of his kidney transplant this Saturday, with a ceremony and plaque dedicating the practice green at Sundale Country Club to his donor, Adrian Mercado. It is Girish’s hope that this life saving act will inspire new donors.

__________________________________

Religious bread? Canceled!

Mini Kenny illustrated the Cancel Culture with a video of racist and politically incorrect products on the shelves at Trader Joe’s. Definitely exhibited how extreme it could get. Big Kenny added his own take – Canceled John Wayne.

The Duke? Canceled!

__________________________________

COVID CONNECT

It's what you'd call a "love/hate" relationship.

Sheryl and Lou Barbich were the focus of the COVID Connect video. Note: Sheryl should not be ‘accountable’ for her actions during this new office sharing arrangement.

PROGRAM:

Marc Doss, Wells Fargo Regional Chief Investment Officer, Greater San Diego Area

Topic:

2020 / 2021 Outlook - Recession, Recovery & Resilience Factors that affect the global economy

Challenges:

High unemployment rate until vaccine;
Difficult operating environment;
Election, social unrest;
China conflict intensifies – this is the defining geo-political issue;
Extreme uncertainty.

Positives:

Economy opening;
Science will prevail;
Fed policy and stimulus programs;
Vaccines rapidly progressing;
Economic resilience and innovation.

Other factors:

Unemployment was at a 50 year low. Now 11%+ and improving in a consumption economy;
Central bank assets have increased as more liquidity is injected into the market;
Lower interest rates suppress the federal debt payment burden even as outstanding debt soars. Growth is the key to managing the debt;
After a deep but short 2020 recession, a modest expansion through 2021 is expected. China’s numbers are buffering this year’s worldwide figures.

Global Equities:

Equity markets have had a surprising recovery overall, but still volatile.
Safe yields will be hard to find. US large and mid-cap equities are generally preferred to international and are considered a higher quality sector. Information technology is considered most-favored. Communication services, consumer discretionary, and health care are considered favored sectors.
Real estate, commodities (oil, gold, energy-related master limited partnerships) can be opportune.

Longer-Term:

Science will prevail.
Consumption patterns are changing (online, telemedicine, communication);
Business will add flexibility, and maintain efficiency;
The pandemic will likely intensify existing stress;
Government influence will increase, for better or worse. More revenue needed. Growth is key!
Healthcare will play an increasingly prominent role.

Key Points from Questions/Answers:

With the government continuing to print money, taxes will go up and currency will be devalued. This makes gold a good play, and is why growth is so necessary – taxes without growth won’t solve the problem;
PPP – There will be a new round, a second shot for small business;
He doesn’t expect the inverted yield curve, considered an indication of recession, to pan out because of sound fundamentals leading into the pandemic;
Projections for S&P earnings – looking beyond even next year to 2023 for normalcy;
Doesn’t expect the dollar to lose its reserve status in our lifetimes;
China is slowing, turning inward for demand and consumption. Supply chains are pulling away, exports will diminish;
The US economy is “still the cleanest shirt in the dirty laundry.” Its ability to grow is much better than anywhere else.