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Reopening and resurgence.

The U.S. is struggling with a resurgence of COVID-19 cases in several states as the country reopens for business. Texas, Florida and Arizona are being hit especially hard, forcing the states to recommit to mitigation practices to try and stem the rising tide of positive cases.

Two unemployment scenarios.

Many companies were able to retain or rehire their employees during the initial shutdown with help from the PPP loan program. With positive cases on the rise and mitigation efforts increasing in response, a second, more permanent, wave of layoffs could hit the service industry. States and municipalities have grim budgetary prospects as well. The pandemic has increased costs and decreased revenue for state and local governments across the country. As governments seek to right size their annual budgets, there is big potential for a coming wave of layoffs for government workers. Either scenario will likely lead to more volatility and tougher times in the investment markets.

Q2 earnings reports.

Earnings will once again be front and center as we enter the third quarter. Companies will begin reporting second quarter results, which includes much of the coronavirus lockdown, in the second week of July. How the U.S. economy handled the nationwide shutdown will become clearer very soon. As many companies have ceased providing advanced earnings guidance, management commentary will carry added weight. This quarter’s earnings could prove a crucial pivot point in the economic recovery moving forward.