Meet our tax season interns! They will be assisting our tax preparation team with document intake and digital set up as well as support on special projects.
All four students were selected for VNFA’s
tax season internship program, which is in its sixth year. The program is
designed to provide real-world experience for individuals interested in a
career that may include tax planning. Tax interns are exposed to and
participate in every part of the process, working alongside seasoned CPAs and
financial planners in a professional office environment.
Jose
is a senior at DeSales where he is a member of the Accounting/Finance Club. Last
year, he completed an accounting summer internship at Victaulic.
Shane
is a senior at Kutztown where he is also minoring in Information Technology. His
internship experience includes Wenz Tax & Financial Services and Central Susquehanna
Opportunities.
Jack
is a junior at Muhlenberg and is working on the final stages of becoming a
Certified Public Accountant (CPA). He balances his studies with on the
Muhlenberg football team.
Jeffrey
is a junior at Lehigh where his accounting major is focused on an information
technology track. Last year, he completed an accounting internship with
Historic Bethlehem Museums and Sites.
#TeamVNFA In the News Financial Advisor Mike Ippoliti, MBA, CFP was featured in a special FISCAL supplement of the Express Times on Sunday – 10 great ways to maximize your long-term wealth.
Our Head of Investments, Connor Darrell
CFA, was featured in a Lehigh Valley Business article last week about AI in the
financial industry.
“It’s changing the role that an analyst or
portfolio manager might have and takes away what might have been a
time-consuming task, Darrell said. “I think it augments the process, just
having more information at your fingertips. It gives us more tools to choose
from.” READ
MORE at lvb.com
by Connor Darrell CFA, Assistant
Vice President – Head of Investments Global
equity markets moved lower last week with concerns over the economic impacts of
the coronavirus weighing heavily on investors’ minds. Emerging Markets stocks,
of which Chinese equities are a major component, were hit hardest. Large-scale
business closures and supply chain disruptions are anticipated to negatively
impact economic growth in the near-term, and both stock and bond prices have
begun to reflect that uncertainty. The headlines coming out of China with respect
to the virus have been unnerving, but a look at prior outbreaks suggests that
the market impacts may be relatively short-term in nature. Of course, all
outbreaks are unique, and the scientific community still knows very little
about the new coronavirus, so it is unsurprising that markets have reacted in
the way they have. The situation in China is rapidly evolving, so in order to
help keep tabs on new developments, we will be tracking two primary facets of
the disease over time; contagion and severity. Below we provide some
perspective on both of these key considerations as well as a comparison to
prior outbreaks. We will continue to
provide updates to our assessment in future iterations of The Weekly Commentary.
Severity There remains little clear information about the true severity of the virus, especially as it relates to the impacts on different age cohorts, whether deaths have occurred primarily in higher risk patients, etc. However, we do know that as of Monday morning, confirmed cases totaled 17,489 worldwide (with about 99% occurring in mainland China). Of those cases, the virus has been connected to 362 deaths, translating to a death rate of just over 2%. For context, the SARS (Severe Acute Respiratory Syndrome) outbreak of 2003 had a death rate of 9.6%, while the death rate associated with the seasonal flu is about 0.05% (according to the World Health Organization). One promising datapoint is that there are over 500 cases of patients who contracted the illness and have since recovered and been released from the hospital.
Contagion While the coronavirus appears to be significantly less life-threatening than both SARS and MERS (Middle East Respiratory Syndrome), it does appear to spread more quickly. During the SARS outbreak, the World Health Organization identified 8,098 probable cases, and that number has already been surpassed by the new coronavirus. Chinese authorities have responded by placing over a dozen cities under quarantine, and travel to and from mainland China has been significantly reduced. As of now, it is the rising level of contagion that seems to be having the biggest impact on markets.
Market History Evaluating market history can often be a helpful starting point for an assessment of what might be expected in the future. Despite the differences in severity and rate of contagion between the two diseases, the SARS outbreak of 2003 remains the most logical point of comparison for the new coronavirus. During the SARS outbreak (which also originated in China), there was a measurable short-term impact on southeast Asian economies. Economic growth in Hong Kong briefly fell into negative territory, and Chinese economic growth was also impacted. However, the Chinese economy was undergoing a rapid transformation and was exhibiting very high levels of growth during this time period, and so economic output remained quite strong throughout the outbreak. Asian equities sold off during the peak of the SARS hysteria, and other global equity markets also struggled to generate positive returns (though the U.S. market remained quite resilient). Altogether, the outbreak lasted about nine months and both the economy and markets were able to rebound within a relatively short period of time. The chart below summarizes market returns in different regions during the peak of SARS hysteria as well as the ensuing months after authorities began to contain the outbreak. With the SARS outbreak, it is clear that the market impacts were short-lived. However, it will be important to monitor the current situation for further developments, especially as it relates to the rate of contagion and severity of the new coronavirus.
THE NUMBERS 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 excluding dividends. Interest Rates: Federal Reserve, Freddie Mac
U.S. ECONOMIC HEAT MAP
The health of the U.S. economy is a key driver of long-term returns in the stock market. Below, we grade 5 key economic conditions that we believe are of particular importance to investors.
US ECONOMY
CONSUMER HEALTH
VERY POSITIVE
The consumer has been the bedrock of the US economy through much of the current expansion and we have seen little to suggest that this cannot continue.
CORPORATE EARNINGS
NEUTRAL
Corporate earnings growth was weak throughout 2019 as a result of slowing in the global economy and trade policy uncertainty. However, analysts are expecting mid to high single digit earnings growth in 2020, which will be important to sustaining recent levels of equity returns.
EMPLOYMENT
VERY POSITIVE
December’s headline jobs growth number of 145,000 missed consensus expectations, though the unemployment rate remained stable at 3.5%; a 50-year low. Despite the softer than anticipated results in December 2019 was an incredibly strong year for the labor market, and it remains the healthiest area of the economy.
INFLATION
POSITIVE
Inflation is often a sign of “tightening” in the economy and can be a signal that growth is peaking. Recent inflationary data has increased slightly, but inflation remains benign at this time, which bodes well for the extension of the economic cycle.
FISCAL POLICY
POSITIVE
The Tax Cuts and Jobs Act of 2017 lowered the effective tax rates for many individuals and corporations. We view the cuts as a tailwind for economic activity over the next several years.
MONETARY POLICY
POSITIVE
With the Federal Reserve expected to refrain from any further adjustments to interest rates without a material change in the economic outlook, it is unlikely that changes in Fed Policy will disrupt the economic cycle in the near future. Furthermore, the low absolute level of interest rates remains a positive for markets.
GLOBAL CONSIDERATIONS
GEOPOLITICAL RISKS
NEGATIVE
Our assessment of Geopolitical Risks is NEGATIVE at this time as a result of the continued spread of the coronavirus outside of mainland China. The virus poses a threat to economic growth and consumer spending in affected regions as a result of the “fear factor” it induces.
ECONOMIC RISKS
NEUTRAL
Due to low inflation and weak economic activity, central banks around the world remain in a very accommodative stance. We have seen some recent evidence of modest recovery in places like Germany, but overall, we expect global economic growth to remain modest.
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.
