Message from the CEO – May 5, 2020

Dear Clients & Friends,

As I say in the related video I recorded from my home, these are unprecedented times. As such, our physical office locations will remain closed until further notice for the safety of our employees and our clients. I am pleased to say that our entire team is working remotely successfully – albeit sometimes a little differently – to continue to provide our suite of services for your financial life. Our commitment to a client-first focus is what continues to keep us strong in this, our 35th year of business.

Since 1985, VNFA has held strong and steady through many historical events in our lives and in the financial markets. I am confident in our firm’s infrastructure and our professional team to see us all through this pandemic as well. Thank you for your continued dedication to and trust in our team.

If you are not already following us on social media, here are links to our pages on Facebook, Twitter and LinkedIn, as well as our YouTube channel for video messages. We plan to continue to provide thought leadership, important news and announcements, and updates on our staff’s efforts in our community.

Our tax team will be reaching out soon to those still waiting with next steps in the preparation process on the way to the new July 15 filing deadline. Thank you for your patience as we put together resources and processes to ensure safety and efficiency.

If you need to reach any of us – including me – please call our main office line at 610-868-9000 and use the voicemail prompts to leave a message. We are set up to receive an e-mail with the recording of your message immediately, so that we can listen and respond in a timely manner. You can also e-mail any of us directly or send a general message for our team to

I will not inundate you with messages, but I will continue to provide updates periodically or as we have any changes to announce. We look forward to a day when we can all be together again. Until that time, stay safe and healthy.

Matt Petrozelli
President and CEO
Valley National Financial Advisors

The Markets This Week

by Connor Darrell CFA, Assistant Vice President – Head of Investments
Stocks and bonds in the U.S. were largely unchanged week over week, although international equities in both developed and emerging markets managed to generate relatively robust returns as efforts to reopen economies continued. Investors also got their first look at a very ugly Q1 GDP figure, which came in at its lowest level since the Global Financial Crisis. Q1 GDP, which declined at an annualized 4.8% rate despite containing over two months of relatively stable economic activity, is expected to pale in comparison to the contraction anticipated for Q2. Though estimates are extremely difficult at this point in time, some economists are calling for Q2 annualized declines of up to 40% (although these estimates vary wildly depending upon the source). Unemployment data is expected to be equally bad, with some calling for that figure to reach as high as 20%.

Three of the world’s major central banks (the Federal Reserve, the ECB, and the Bank of Japan) held press conferences last week and announced continued adjustments to their respective policy initiatives. “Flexibility” was the theme of the week, as bankers hinted that they would be looking to do all that is necessary to preserve liquidity in markets and keep capital flowing to where it is needed. In the U.S., Fed Chairman Jerome Powell announced a further expansion of the bank’s “main street lending program,” making it available to more businesses and lowering the minimum loan size.

Also offsetting some of the market’s ire over the economic data were reports that an antiviral drug developed by Gilead Sciences was showing some promise in clinical trials. The preliminary clinical trials for Remdesivir (as the drug is called) were discussed in detail by Dr. Anthony Fauci during his daily press conferences last week. Dr. Fauci’s apparent confidence in the drug’s promise was quickly followed by announcements that the FDA would likely fast track its path to broader use in severe cases of COVID-19. It is important to note that the drug does not represent a cure for the disease, but it may help to improve patient outcomes. As the scientific community around the world remains fully mobilized, we expect that this will not be the last of promising developments with respect to our ability to fight the virus. However, an effective and well distributed vaccine will likely be required before we can finally put the COVID-19 pandemic behind us.

The Numbers & “Heat Map”

Sources: Index Returns: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized. Interest Rates: Federal Reserve, Mortgage Bankers Association

The health of the economy is a key driver of long-term returns in the stock market. Below, we assess the key economic conditions that we believe are of particular importance to investors.




The consumer was the bedrock of the US economy through much of the previous decade. However, our Consumer Health grade remains VERY NEGATIVE as a result of the unprecedented social distancing and quarantining efforts currently being employed to fight the spread of COVID-19.



Coming into the year, analysts were expecting mid to single digit earnings growth, but the spread of COVID-19 is likely to have a substantial impact on near-term earnings forecasts. However, earnings could bounce back quickly once the pandemic has run its course.



We expect continued job losses due to the suppression of economic activity necessary to combat the spread of COVID-19.



Inflation is often a sign of “tightening” in the economy and can be a signal that growth is peaking. The deflationary environment created by COVID-19 should provide additional room for robust stimulus from both fiscal and monetary policy initiatives.



The US Government has passed a series of fiscal measures to combat the economic impacts of the COVID-19 pandemic. The largest of these measures, known as the CARES Act, provides approximately $2.2 trillion of support for businesses and families that are impacted by business closures and unemployment.



In response to the threat of COVID-19, the Federal Reserve has implemented two emergency rate cuts and has moved its target interest rate back to zero. Additionally, it has announced its intention to conduct further asset purchases to support markets. We believe that the Fed is doing all it can to support the economy and markets.




With COVID-19 being declared a global pandemic, our geopolitical risks rating is VERY NEGATIVE. However, we think it is important for investors to disentangle the public health concerns over the near-term from the expectations for markets over the long-term. The pandemic will ultimately prove to be transitory in nature.



The economic impacts of the COVID-19 pandemic are likely to be substantial. However, we believe that the eventual economic recovery (which will be aided by historically large economic stimulus) may occur more swiftly than from previous economic shocks.

The “Heat Map” is a subjective analysis based upon metrics that VNFA’s investment committee believes are important to financial markets and the economy. The “Heat Map” is designed for informational purposes only and is not intended for use as a basis for investment decisions.

Did You Know…?

Today is Giving Tuesday NOW – A day of global action for giving and unity in response to COVID-19.

In support of our community, VNFA is donating $1,000 each to the five non-profit organizations we have partnered with for the Volunteer Challenge these past five years.

Special thanks for Volunteer Center of the Lehigh Valley ( for aiding our team in making these connections. We hope to inspire as many people as possible to do what they can on this Giving Tuesday and every day.

We invite you to learn more about our partners:

Third Street Alliance for Women & Children –

Cancer Support Community Greater Lehigh Valley –

Second Harvest Food Bank –

Paxinosa Elementary (donated through Family Connection) – (

Northeast Community Center –

Quote of the Week

“Some people give time, some money, some their skills and connections, some literally give their life’s blood. But everyone has something to give.” – Barbara Bush

“Your Financial Choices”

Tune in Wednesday for another new “Your Financial Choices” show on WDIY. This week’s topic: Cash-Flow Discussions.”

Laurie will be recording the show Tuesday to air at the normal time, Wednesday, 6-7 p.m. She will answer questions that have been submitted via

Live episodes of “Your Financial Choices” are postponed until further notice as Laurie and her guests are working from home in response to guidance around the COVID-19 pandemic. WDIY will continue to broadcast prerecorded local shows as well as available NPR programming. Please continue to support local radio!

Recordings of past shows are available to listen or download at both and