Monthly Archives: September 2020

Celebrating 35 Years!

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On August 28, 1985, our founder Tom Riddle received an official phone call informing him that he was approved to do business. Today, we continue to uphold his original mission to help our clients make the right financial choices in pursuit of their lifelong goals and dreams.

To mark our 35th anniversary, #TeamVNFA celebrates one of our core values. RESPECT: A deep appreciation of the past, solid understanding of the current, and a drive to continue to make VNFA better in the future.

We look forward to the years ahead with our family of clients.

VNFA NEWS

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Team VNFA Welcomes New Head of Investments

Valley National Financial Advisors (VNFA) has hired a William Henderson to the position of Vice President, Head of Investments. Bill joins the team from BlackRock, Inc, where he worked for the past 26 years as a member of the Global Fixed Income Team, Managing Director and Senior Portfolio Manager.

In his role, Bill will be responsible for coordinating and managing the activities of the investment team, which oversees the development and implementation of the investment strategies employed in the management of client portfolios. He will also work closely with the operations team to ensure proper execution of trading activities and will oversee communication of the firm’s investment philosophy and capital market views to clients, prospects, and other stakeholders. 

Bill has a bachelor’s degree in Finance and a Masters in Business Administration (MBA), both from Pennsylvania State University. His professional experience includes portfolio management, group portfolio strategy, and client service.

 “We are thrilled to have someone with so much industry experience join our team as a leader for our investment department,” said Matt Petrozelli, CEO. “As our firm celebrates 35 years in business, it is important that we have the right people in the right roles. Bill is not only a match professionally, but he also shares our VNFA values to put clients first and live in the community.”

Outside of his professional work, Bill has served as a volunteer for the Boy Scouts of America for the past 30 years, and head chef for St. Paul’s Lutheran Church Cooking for the Hungry Program. He is also a committee chair and past president for St. Paul’s, and a committee member and past board member for St. David’s Golf Club.

Bill will work remotely along with the rest of the team as VNFA offices remain closed in order to keep our staff and clients safe, but he will eventually work full-time at the firm’s Bethlehem headquarters.

The Markets This Week

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by Maurice (Mo) Spolan, Investment Research Analyst
Stocks had a strong week as the S&P 500 finished up over 3%. The bellwether equity index returned over 7% this month, the best August performance since 1986. International equities also fared well over the past month. The Barclay’s Aggregate Bond Index was down about one half of one percent last week, ending August 1% in the red.

The noteworthy event of the week was Fed President Jay Powell’s virtual address. In a departure from legacy policy, the central bank is slightly altering its approach to inflation. Whereas in the past the Fed aimed to curb inflation above 2% via interest rate hikes, the central bank will now allow inflation to overshoot the target such that its long-term average is 2%. Inflation has been tame since the Great Financial Crisis, generally under 2%.

The market seemed to perceive Powell’s comments as affirmation of a “lower for longer” interest rate environment, which is a bullish dynamic for equities. VNFA Head of Investments, Bill Henderson, noted Powell’s intentions to direct monetary policy on a prospective, rather than reactionary, basis as further indication that the central bank will be accommodative going forward.

The Numbers & “Heat Map”

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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. Interest Rates: Federal Reserve, Mortgage Bankers Association

MARKET HEAT MAP
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.

US ECONOMY

CONSUMER HEALTH

NEGATIVE

 GDP declined at an annualized rate of 32.9% in Q2, the fourth-largest fall in the last 100 years. Although the figure is staggering, it was in-line with economists’ expectations. Retail sales increased 1.2% in July; a healthy mid-pandemic result, but sharply below June’s 7.5% rise.

CORPORATE EARNINGS

VERY NEGATIVE

 S&P 500 earnings have fallen by around 33% in Q2, the sharpest year-over-year decline since 2008. However, some companies in certain sectors have reported strong results, such as in Retail and Cloud Computing.

EMPLOYMENT

VERY NEGATIVE

 1.8 million jobs were added in the U.S. during July. While gains, rather than losses, are welcomed, the figure represents a considerable deceleration from the 4.8 million jobs added in June. Unemployment remains very high at 10.2%.

INFLATION

POSITIVE

 Core inflation increased 0.6% in July, the largest one-month jump since 1991. However, on an annualized basis, CPI is running at a moderate 1.6%, below the Fed’s 2% target. More sustained indications of inflation will be necessary before the central bank curbs its stimulative policies.

FISCAL POLICY

VERY POSITIVE

 Weekly unemployment benefits are now being disseminated on a state-by-state basis, through applications to a Federal slush fund, and total $300 per week, versus the previous rate of $600 under the now-expired Federal plan.

MONETARY POLICY

VERY POSITIVE

 The Federal Reserve has supported asset markets with unprecedented speed and magnitude in response to COVID-19. In our view, Fed President, Jay Powell, reaffirmed the central bank’s accomodative stance in his virtual address “at Jackson Hole”.

GLOBAL CONSIDERATIONS

GEOPOLITICAL RISKS

VERY NEGATIVE

 The relationship between the US and China, the world’s two largest economies, was already weakened by the trade war but has deteriorated further as a result of COVID-19.

ECONOMIC RISKS

VERY NEGATIVE

 The impacts from COVID-19 were as swift and pronounced as any shock in modern times. Robust monetary and fiscal stimulus stabilized the system, however, economic activity remains well-below that in 2019, and uncertainty remains high.

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.

“Your Financial Choices”

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Tune in Wednesday, 6 PM for “Your Financial Choices” show on WDIY 88.1FM: LABOR: Employment benefits, open enrollment and retirement planning.

Laurie can take your questions live on the air at 610-758-8810, or address those submitted via  yourfinancialchoices.com. Recordings of past shows are available to listen or download at both yourfinancialchoices.com and wdiy.org.