Stock Market Today: Powell’s Presser Pumps the Market’s Brakes

Federal Reserve Chair Jerome Powell gave investors reason for pause on Wednesday afternoon in a modestly lower day for stocks.

The Fed itself, following its latest two-day policy meeting, announced it would keep its benchmark rate near zero, stating that “indicators of economic activity and employment have strengthened” amid policy support and progress on COVID vaccinations.

“With no meaningful change to monetary policy or communication, this meeting was simply a message to market participants to sit back and observe as the economic recovery continues to unfold,” says Charlie Ripley, senior investment strategist for Allianz Investment Management.

But Powell managed to get traders to zigzag a bit in his ensuing press conference.

Investors cheered after he said it could be “some time” before the economy hits its targets, and that the Fed is “not thinking about thinking about tapering” (emphasis ours). But those quick gains reversed after Powell dropped an F-bomb – “froth” – when describing U.S. equity markets.

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All the major indices lost ground by the closing bell. The Dow Jones Industrial Average dropped 0.5% to 33,820, weighed down by Amgen (AMGN, -7.2%) and Boeing (BA, -2.9%), which both reeled in the wake of disappointing earnings reports. The S&P 500 (off marginally to 4,183) and Nasdaq Composite (-0.3% to 14,051) also finished in the red.

Other action in the stock market today:

  • Visa (V, +1.6%) was one of the Dow’s best performers. The payments giant reported stronger-than-expected fiscal second-quarter earnings and revenue, and said payments volume jumped 11% over the three-month period.
  • F5 Networks (FFIV, -9.1%) took a notable dive after the tech name last night reported earnings. For its fiscal second quarter, FFIV beat on both the top and bottom line, but the company’s guidance for the current quarter came in below estimates.
  • The small-cap Russell 2000 actually finished in the black, gaining 0.1% to 2,304.
  • U.S. crude oil futures jumped 1.5% to settle at $63.86 per barrel. Boosting prices to their highest finish in six weeks was data that showed a smaller-than-anticipated weekly rise in domestic crude inventories and a commitment from OPEC+ to continue easing back on oil production. 
  • Gold futures slipped 0.3% to $1,773 an ounce.
  • The CBOE Volatility Index (VIX) declined 1.2% to 17.35.
  • Bitcoin prices improved by 1.2% to $55,470. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
stock chart for 042821stock chart for 042821

Run, Economy, Run!

Powell might keep Wall Street guessing, but economic improvement seems a settled matter.

In addition to the Fed’s nod of confidence, Barclays economists on Wednesday upwardly revised their official Q1 GDP growth forecasts by half a percentage point to 5.5% – aligning it with Kiplinger economists’ expectations.

“At the time of our previous Q1 GDP forecast revision (see US GDP Tracking , April 16, 2021), we were still missing some key source data for private inventory investment and international trade,” say Barclays economists. “We had viewed risks to those forecasts as being to the downside and refrained from fully reconciling our official forecast with the tracking estimates until these components were informed by hard data.

“With the March estimates in hand, we now fully reconcile our official forecast with the tracking estimate.”

Largely speaking, this continues to augur well for the prospects of so-called “recovery stocks,” barring any exogenic shocks. Yes, that’s bound to be a boon for restaurants, airlines, cruise lines and other consumer-facing businesses. But if it powers a vehicle or helps get something built, chances are its fortunes could continue to improve, too.

Take these five commodity picks, for instance, that include a wide range of mining and even forestry opportunities.

Oil stocks should be on the menu, too. U.S. crude oil has shot up by more than 30% year-to-date, translating to much more profitable operations for a host of energy plays that have spent years slimming down operations amid far leaner prices. These seven plays in particular have managed to attract a horde of bullish calls of late.

Kyle Woodley was long BA as of this writing.


Everything You Need for Your Kitchen & Nothing More

Kitchens. They’re amazing spaces. They can be visually stunning. They must be total workhorses. They’re quite often the heart of the home. But they can also accumulate a lot of CRAP.

As I work to not only design but also fully outfit the kitchen for the Hood Canal Cottage, I’m starting completely from scratch. No hand-me-down casserole dishes, no knives I’ve carted around since college, no random herb scissors that I’ve never ever used. For once, I get to hand-select every tool and every object that comes into the space.

With that total blank slate, I find myself often thinking (ok, obsessing) about what I want this kitchen to have. As an avid cook, as we probably all are coming through Covid, I want kitchen tools that are really pretty, but also highly functional. And nothing else.

This kitchen, designed by Our Food Stories out of a refurbished old schoolhouse in the middle of the German countryside, is a total mood. Featuring deVol kitchen cupboards, tiles, shelves, light fixtures, hardware and more. This kitchen is certainly a showcase for the many of the pieces on my list of must-have kitchen tools – and of course, it does so beautifully.

This space immediately transports you to an idyllic rural retreat. I imagine walking through overgrown gardens, picking fresh roses and making multi-course Sunday lunches here.

I love how this kitchen keeps so many key kitchen tools close at hand. While I might not be doing quite as many open shelves at Hood Canal, there is a lot to be said for having key tools within arms reach.

There’s nothing that drives me crazier than a poorly outfitted kitchen. But an overcrowded kitchen can be equally crazy-making. You have to strike that balance.

For me, the key kitchen tools I turn to time and again include one good set of pots and pans, a cast iron skillet, a good set of wooden spoons and spatulas, a top notch cutting board (or several) and then all those little tools that you need when you’re in the middle of pulling together a recipe – measuring cups, knives, peelers, strainers, graters, zesters – all the speciality things that let you add the finer components of a dish.

Those speciality tools are the kinds of things that far too many kitchens lack. Or they’re the big bulky OXOX ones you get at a grocery store that feel chunky in my hand and will just clog up my limited drawer space in the new kitchen. She gonna be cute, but she’s not going to be big.

As the weeks have progressed, I’ve been slowly but surely amassing my ultimate kitchen wish-list. Each kitchen tool, appliance, or serving piece needs to have a very critical purpose and look damn good while doing it.

I thought I’d share my wishlist with you. It’s certainly not comprehensive. As I cook every evening some other thing in my San Francisco kitchen makes me think oh yes, I have to find the beautiful version of this for Hood Canal. But all the extraneous stuff I have in my SF kitchen also makes me want to pull my hair out. I’m constantly digging for my one favorite knife or pan or bowl.

I hope you find something below you’ve been searching for. If you spot a key kitchen tool that I’m still missing, please tell me in comments! I consider my ultimate quest to outfit the ideal kitchen.

I’m also regularly adding favorites for the kitchen in the Apartment 34 SHOP so be sure to check it out too!

all images by Our Food Stories



5 Mortgage REITs for a Yield-Starved Market

Income is a scarce commodity these days, and that has investors looking for yield in some lesser-traveled areas of the market. And that includes mortgage REITs (mREITs).

Even after months of rising yields, the rate on a 10-year Treasury is a paltry 1.6%. That’s well below the Federal Reserve’s targeted inflation rate of 2%, meaning that investors are all but guaranteed to lose money after adjusting for inflation.

The story isn’t much better with many traditional bond substitutes. Taken as a sector, utilities yield only about 3.4% at current prices, according to data compiled by income-focused index provider Alerian, and traditional equity real estate investment trusts (REITs) yield only 3.2%.

If you’re looking for inflation-crushing income, give the mortgage REIT industry a good look. Unlike equity REITs, which are generally landlords with brick-and-mortar properties, mortgage REITs own leveraged portfolios of mortgages, mortgage-backed securities and other mortgage-related investments.

In “normal” economic times, mortgage REITs have a license to print money. They borrow money at cheap, short-term rates, and invest the proceeds in higher-yielding longer-term securities. A steep yield curve in which longer-term rates are significantly higher than shorter-term rates is the ideal environment for mREITs, and that’s precisely the scenario we have today.

Mortgage REITs are not without their risks. Several mREITs took severe and permanent losses last year when they were forced by nervous brokers to make margin calls. Investors worried that the COVID lockdowns would result in a wave of mortgage defaults, leading them to sell first and ask questions later. And many have a history of adjusting the dividend not just higher, but lower, as times require.

But here’s the thing. Any mortgage REIT trading today is a survivor. They lived through the apocalypse. Whatever the future might hold, it’s not likely to be as traumatic as a once-in-a-century pandemic.

Today, let’s take a good look at five solid mortgage REITs that managed to survive and thrive during the hardest stretch in the industry’s history.

Data is as of April 21. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

1 of 5

Annaly Capital Management

Annaly Capital Management logoAnnaly Capital Management logo
  • Market value: $12.3 billion
  • Dividend yield: 10.0%

We’ll start with the largest and best-respected mREIT, Annaly Capital Management (NLY, $8.80). Annaly is a blue-chip operator with a $12 billion-plus market cap that has been publicly traded since 1997. This is a company that survived the bursting of the tech bubble in 2000, the implosion of the housing market in 2008 and the pandemic of 2020, not to mention the inverted yield curves and nonstop Fed tinkering of the past two decades.

Annaly was hardly immune to last year’s turbulence. But  able to skate by the turbulence of last year due to large part to its concentration in agency mortgage-backed securities (MBSes), or those guaranteed by Fannie Mae and Freddie Mac. Investors were confident that, no matter what unfolded, mortgages backed by government-sponsored entities were likely to get paid.

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At current prices, Annaly yields 10% on the nose, which is about average for this stock. In its two decades of trading history, Annaly has yielded as much as 22% and as little 3% – in part because of price variance, but also because NLY isn’t shy about making dividend adjustments in boom and bust times. But it always seems to come back to the 9% to 10% range.

Still, if you’re new to mortgage REITs, Annaly is a good place to start.

2 of 5

AGNC Investment

AGNC Investment logoAGNC Investment logo
  • Market value: $9.3 billion
  • Dividend yield: 8.3%

Along the same lines, AGNC Investment (AGNC, $17.44) is a solid, no-drama income option.

Take a minute and say “AGNC” out loud. It sounds like “agency,” doesn’t it?

That’s no coincidence. AGNC Investment specializes in agency mortgage-backed securities, making it one of the safest plays in this space.

For most of AGNC’s history, the stock has traded at a premium to book value. This makes sense. AGNC can borrow cheaply to juice its returns, and we as investors pay a premium to have access. But during the pits of the pandemic, AGNC dipped deep into discount territory. That discount has closed over the past year, but shares remain about 2% below book value.

The yield is a very competitive 8.3% as well. That’s a little lower than some of its peers, but remember: We’re paying for quality here.

3 of 5

Starwood Property Trust

Starwood Property Trust logoStarwood Property Trust logo
  • Market value: $7.3 billion
  • Dividend yield: 7.6%

For something a little more exotic, give the shares of Starwood Property Trust (STWD, $25.38) a look.

Unlike Annaly and AGNC, which both focus on plain-vanilla single-family home mortgage products, Starwood focuses on commercial mortgage investments. Starwood is the largest commercial mortgage REIT by market cap with a value north of $7 billion.

Approximately 60% of Starwood’s portfolio consists of commercial loans, with another 9% in infrastructure lending and 7% in residential lending. And unlike most mortgage REITs, Starwood also has a property portfolio of its own, making up about 14% of the portfolio. This makes Starwood more of an equity REIT/mortgage REIT hybrid than a true mREIT, though clearly the business leans heaviest toward “paper.”

This time last year, Starwood’s property portfolio had its points of concern. As a commercial mortgage REIT, it had exposure to hotels, offices and other properties hit hard by the pandemic. But as life gets closer to normal by the day, those concerns are evaporating. And frankly, they were always overstated. Starwood runs a conservative portfolio, and the loan-to-value ratio for its commercial portfolio is a very modest 60%. So, even if delinquencies had become a major problem, Starwood would have been able to liquidate the portfolio and safely be made whole.

Today, Starwood is an attractive post-COVID reopening play with a 7%-plus dividend yield. Not too shabby.

4 of 5

Ellington Residential Mortgage REIT

Ellington Residential Mortgage REIT logoEllington Residential Mortgage REIT logo
  • Market value: $148.6 million
  • Dividend yield: 9.3%

For a smaller, up-and-coming mortgage REIT, consider the shares of Ellington Residential Mortgage REIT (EARN, $12.04). Ellington began trading in 2013 and has a market cap just shy of $150 million.

Ellington runs a portfolio consisting mostly of agency MBSes, but the company also invests in private, non-agency-backed mortgage securities and other mortgage assets. As of the company’s latest earnings report, the portfolio was weighted almost exclusively to agency securities. The REIT held $1.1 billion in agency residential MBSes and had just $17 million in non-agency. Ellington opportunistically snapped up non-agency MBSes when prices collapsed last year and has been slowly taking profits ever since.

Despite being a small operator, Ellington navigated the COVID crisis better than many of its larger and more-established peers. Its stock price lost 65% of its value during the March 2020 selloff, but by the beginning of the third quarter, Ellington had already recouped all of its gains.

Today, the shares yield a mouth-watering 9.2% and trade at a respectable 10% discount to book value. Considering that the industry itself trades very close to book value, that implies a healthy discount for EARN shares.

5 of 5

MFA Financial

MFA Financial logoMFA Financial logo
  • Market value: $1.9 billion
  • Dividend yield: 7.0%

Some mortgage REITs had it worse than others last year. A few really took damage as they were forced to sell assets into an illiquid market to meet margin calls. But some of these less fortunate mortgage REITs now represent high-risk but high-reward bargains.

As a case in point, consider MFA Financial (MFA, $4.26). MFA got utterly obliterated during the COVID crisis, dropping from over $8 per share pre pandemic to just 32 cents at the lows. Today, the shares trade north of $4.

MFA will never fully recoup its losses. By liquidating its assets at fire-sale prices during the margin calls, the REIT took permanent damage. But today’s buyers can’t worry about the past; we can only look to the future.

At current prices, MFA could be a steal. The shares trade for just 77% of book value. This means that management could liquidate the company and walk away with a 23% profit (assuming they took their time and weren’t forced to sell at unfavorable prices). They also yield an attractive 7%.

There is no guarantee that MFA returns to book value any time soon. But we’re being paid a very competitive yield while we wait for that valuation gap to close.


The Perfect Storm for Retirees

Today’s retirees are unlike any other retirees in history: They’re living longer, and many of them want to spend more in retirement than previous generations. At the same time, the fear of running out of money is incredibly common, and for good reason.

The bargain made decades ago in the transition from defined benefit pension plans to the modern 401(k) gave workers control over their savings but also transferred longevity risk from the employer to the worker. As such, these days few retirees can rely on a significant pension and must make their savings last for decades. This may be even more difficult considering that we could see persistently low interest rates, higher inflation and market volatility in the coming years.

The result? Today’s retirees could face a perfect storm, and they may have to use different financial planning strategies than retirees of the past.

Low Interest Rates

The Federal Reserve recently announced that it would maintain the target federal funds rate (the benchmark for most interest rates) at a range of 0% to 0.25%. The Fed cut rates down to this level in March of last year in hopes of combating the crippling economic effects of the pandemic, and it may not raise them for years. Interest rates are expected to stay where they are until 2023. Even when they rise, they could stay relatively low for some time.

As the U.S. government borrowings increase dramatically, the motivation for holding rates down increases. This combination works in favor of immense government borrowing, but for retirees it creates an intrinsic tax in the form of persistently low rates paid on savings. Borrowers love low rates as much as savers detest them. This truth is very much in play today. This poses a problem to retirees who want to earn a reasonable rate of return while minimizing their investment risk.

The Potential for Inflation

Coupled with persistently low interest rates, retirees could face increased inflation in the coming years. Government spending increased significantly due to COVID, with the CARES Act costing $2.2 trillion and the American Rescue Plan Act costing $1.9 trillion alone. The Federal Reserve has said that there is potential for “transient” inflation in the coming months and that it would allow inflation to rise above 2% for some time. While most experts don’t think it’s likely that we’ll return to the high inflation rates of the 1970s, even a normal inflation rate is cause for concern among those nearing and in retirement. Over the course of a long retirement, inflation can eat away at savings significantly.

Consider this: After 20 years with a 2% inflation rate (the Fed’s “target” interest rate), $1 million would only have the buying power of $672,971.

The combination of low interest rates and higher inflation may drive many retirees to take on more market risk than they normally would to account for that.

Market Risk

Those nearing retirement and recently retired can expose themselves to sequence-of-returns risk if they take on too much market risk. This is when a portfolio experiences a significant drop in value while the owner is withdrawing funds, owing to nothing more than unlucky timing. This risk is actuated by the timing of the age of the individual retiree and when they plan to retire, not something anyone usually times around market levels or investment performance but rather around lifestyle or even health factors. As a result, often the portfolio cannot fully recover as the market bounces back, due to the burden of regular withdrawals, and may be left significantly reduced.

Today’s retirees live in an uncertain world with an uncertain market. No one could have predicted the pandemic or its economic effects, and similarly, no one can predict where the market will be next year, in five years or in 10 years. While younger investors can ride out periods of volatility, retirees who are relying on their investments for income may have significantly lower risk tolerance and need to rethink their retirement investment strategy.

Is There a Solution?

This leaves many retirees in a perfect storm. They need to make their savings last longer than any previous generation, but with interest rates at historic lows, they may feel pressured to subject their savings to too much market risk in hopes of earning a reasonable rate of return. The most fundamental step to take is committing to regularized, frequent reviews with your financial adviser. Depending on portfolio size and complexity, this is most often quarterly, but should be no less frequent than every six months. This time investment keeps retirees attuned to shifts in the portfolio that will sustain them for decades to come.

Finally, consider the breadth of options available to your adviser, or on the retail platform you use if you are self-managed. Sometimes having the right tool is everything in getting the job done.  Often advisers have a greater breadth of options available that can more than offset their cost. Remember there are options beyond equities. The best advisers have access to guaranteed income insurance products, market linked certificates of deposits and other “structured assets.” This basket of solutions can provide downside protection ranging from a buffer of say 10%-20% all the way to being fully guaranteed by the issuing insurer or commercial bank. Even within the markets themselves, there are asset managers who create stock and bond portfolios that focus on a specific downside target first, emphasizing downside protection above growth right from the start.

Although market risk remains, it’s true that by focusing on acceptable downside first, those portfolios are likely to weather downturns better even if they do surrender some upside as an offset. And while none of these approaches is perfect, they can work as a component to offset a portion of the market risk retirees probably need to endure for decades to come.

The article and opinions in this publication are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you consult your accountant, tax, or legal advisor with regard to your individual situation. Securities offered through Kalos Capital Inc. and Investment Advisory Services offered through Kalos Management Inc., both at 11525 Park Woods Circle, Alpharetta GA 30005, (678) 356-1100. SouthPark Capital is not an affiliate or subsidiary of Kalos Capital or Kalos Management.

CEO, SouthPark Capital

George Terlizzi has worked in business for more than 25 years as an entrepreneur, consultant, dealmaker and executive for early and mid-stage companies. He has substantial concentrations in finance, technology, consulting and numerous forms of transaction work. Today George advises wealth clients individually and sets the strategic vision for SouthPark Capital. George’s insatiable curiosity, action-oriented approach, and broad-ranging interests are invaluable to those he advises.


COVID-19 Super Savers Need to Carefully Navigate in a Post-Pandemic World

A little over a year ago, COVID-19 hit the United States, altering the fabric of our daily lives and turning the average American’s personal finances upside down. Within weeks, 52% of all households slashed their spending.  From all the upheaval and radical change emerged a new generation of risk-averse, financially conservative people: Meet the super savers.

After COVID reached the United States, we saw a pronounced jump nationwide in the personal savings rate — the amount of people’s disposable income that gets saved or invested. For the last two decades that savings rate sat at just under 10%. In April of 2020 it exploded to 33.7%, more than three times its usual number, according to Federal Reserve data. 

Fast-forward to 2021. The pandemic continues to wreak havoc, and a staggering 61% of Americans say they are in danger of running out of their emergency savings. Super savers are on the opposite end of that spectrum. They are middle-class families who’ve embraced an aggressive level of precautionary saving, or they are people with high incomes who’ve seen their disposable expenses, like entertainment and travel, drop off drastically.   

There may be a light at the end of the tunnel for COVID-19: The current administration expects 300 million vaccines to be administered by the end of July. Things may be on their way back to normal, but where does that leave the super savers who’ve embraced extreme and unsustainable frugality? They had the luxury of an altered pandemic budget working in their favor, but when a sense of normalcy returns to our daily lives later this year, how will they cope?

Super savers will be faced with the opportunity to spend their new nest egg and may feel like they deserve to make up for lost time. When quarantines finally come to an end there will be infinite temptation. If super savers aren’t careful, the pendulum could swing the other way, paving the way for bad spending habits to emerge. They will need to sensibly allocate their funds ahead of time instead of falling into the trap of overindulgence.

Here are some practical tips to keep in mind as they move forward into a return to normalcy:

Don’t Stop Investing

We’ve experienced a high degree of societal turbulence over the last few months, which has bled into the long-term investment practices of so many Americans. Households guided by extreme frugality may have decreased their 401(k) contributions to have more liquid cash on hand. That’s a corner you can’t afford to cut. In the post-pandemic world, super savers must continue their long-term investment strategies. 

Despite a historic level of stock market volatility during the past few months, super savers should not let their hallmark level of risk adversity affect their willingness to invest. This year has been filled with incredible investment opportunities for those willing to embrace even a little risk. But for those geared toward frugality, the age-old advice holds true: Stay the course. Maintaining a solid investment portfolio is worth more than hanging onto your cash, and super savers are in an opportune position to ride out market instability.

Keep Your Debt Under Control

Too much extra cash on hand and nowhere to spend it? That’s the challenge facing super savers when COVID-19 subsides. It’ll be tempting for even the most frugal person to go on a spending spree; that’s human nature. Whether it’s a major home improvement, a new car or extra spending on entertainment, super savers will be hard-pressed to guard the nest egg they’ve built. 

With interest rates at all-time lows, now is the time to make those rates work for you. Look for ways to curb your existing debt —by refinancing your mortgage or seeking lower APR on your credit cards — instead of accruing new debt. 

Curb Extraneous Monthly Expenses 

COVID-19 transformed our homes from a simple living space into a hub for work, school and entertainment. Over the course of the pandemic, it’s been too easy to justify paying for dozens of streaming services, such as Netflix, Amazon Prime or HBO Max. 

As the world opens back up, it’s time to analyze the services you pay for and cut back where you can. As things like travel and entertainment expenses come back online, little recurring charges can add up without providing the same level of value that they previously did.    

Keep Your Budget Flexible and Plan for the Near Future

COVID-19 has made many households fiscally conservative by accident. Families with stable income and a lack of goods and services to spend it on might seem responsible on the surface, but quick and radical changes to personal finances can breed bad spending habits down the road. 

A more realistic budget is one that is flexible and geared toward the near future. When things return to normal, as they inevitably will, super saving patterns will no longer be feasible. To continue enjoying good financial health, avoid large impulsive purchases that further saddle your household with debt, and think about real world costs, such as child care, gas and food. Plan for the concrete and build in money for emergencies, but don’t hoard for a doomsday scenario. By adopting a solid and sensible budget now, super savers can avoid financial pitfalls when we all come back down to earth.   

Securities and investment advisory services offered through Royal Alliance Associates Inc., (RAA), member FINRA / SIPC. RAA is separately owned, and other entities and/or marking names, products or services referenced here are independent of RAA.

CEO and Co-Founder, Mint Wealth Management

For more than 18 years, Adam Lampe has helped high net-worth-individuals, affluent families, foundations and institutions work toward their financial goals through holistic financial planning. As the CEO & Co-Founder of Mint Wealth Management, he leads all development efforts within the firm. Alongside his extensive work serving clients, Adam also teaches retirement planning courses through Lone Star College and Prairie View A&M University satellite campuses around Houston.


Stock Market Today: Markets Settle Down, But Backdrop Remains Rosy

Monday’s blowout session that sent the Dow Jones Industrial Average and S&P 500 to new heights was followed by much calmer, more horizontal, trading on Tuesday.

But it wasn’t for a lack of additional positive ammunition following Friday’s blockbuster jobs report.

This morning’s Job Openings and Labor Turnover Survey (JOLTS) was another window into an improving employment situation, showing that U.S. job openings hit a two-year high in February. Also, the International Monetary Fund (IMF) upgraded its 2021 outlook for both U.S. economic growth (from 5.1% to 6.4%), and global economic expansion (from 5.5% to 6.0%).

Still, the major indices spent Tuesday digesting the prior session’s gains; the Dow slipped 0.3% to 33,430, the S&P 500 was off 0.1% to 4,073, and the Nasdaq Composite was marginally off to 13,698.

Recovery-oriented stocks were among the day’s individual winners, especially those in the restaurant industry. Yum Brands (YUM, +3.1%), Domino’s Pizza (DPZ, +2.4%) and Chipotle Mexican Grill (CMG, +2.4%) all finished solidly in the black.

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Other action in the stock market today:

  • The small-cap Russell 2000 declined by 0.3% to 2,259.
  • U.S. crude oil futures improved by 1.2% to $59.33 per barrel.
  • Gold futures also were higher, by 0.8%, to $1,743 per ounce.
  • Bitcoin prices closed 1.3% lower to $58,242. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
stock chart for 040621stock chart for 040621

E-Commerce Can Still Get It Done

As great as “reopening plays” have been of late, don’t fall into the trap of thinking that all of 2020’s COVID-assisted trends are duds.

Take e-commerce, for instance.

While you might imagine a vaccinated America abandoning its keyboards for the malls, the smart money recognizes that COVID only further entrenched the already growing digital-spending trend, and they see further promise even as more people get ready to go out.

“The convenience offered by eCommerce will continue to be an important consideration to consumers as they return to travel and social activities, and those people who tried shopping online for the first time during COVID are likely to continue using these services with greater frequency moving forward,” says a team of Canaccord Genuity analysts.

Many of the best individual plays are the very same stocks that enjoyed a COVID lift, and some are considered among the market’s most innovative companies — an important quality that can drive outsized long-term returns.

But if you’re hesitant to put all your chips on one or two individual names that could get choppy over the short term, we don’t blame you, and we have a solution: e-commerce funds. Read on as we highlight nine e-commerce ETFs that leverage the growth in digital spending in a variety of ways, and explain how each one might suit different individual investors’ tastes.


When You Have To Retire due to COVID-19

Here’s a stunning fact: The Bureau of Labor Statistics reports that unemployment during the pandemic for workers 55 and older jumped from 3.3% in March 2020 to 13.6% in April 2020. The numbers settled down in the later months, but the question remains: What happened to those older workers laid off from April to July, when the rate remained a high 8.7%?

This type of extended unemployment or forced retirement can cause people to fall completely off the career ladder in their field, leaving them in a difficult spot where they rely on their limited remaining unemployment benefits as they figure out what’s next.

The exact path forward from forced early retirement isn’t the same for everyone. Some people may choose to completely retire and live off their retirement savings and Social Security. Others may chart some way to re-enter the workforce. Let’s take a look at some of the options available to folks who found themselves in forced early retirement due to COVID-19.

In this article

Six steps to take after getting laid off

This situation presents a spectrum of options, ranging from trying to get back into your previous field, looking for a parallel field into which you can transfer skills, starting over professionally, or simply retiring for good.

Lean in on personal and professional relationships

If you’re hoping to stay in your current field, job searching is an obvious next step, but don’t just spend your time looking at Indeed and other job listing sites. Instead, reach out to people that you have worked with and had a positive relationship with in the past and see what opportunities they may know about.

Do your contacts know of any jobs in your previous field that you might be a good fit for? Are they willing to provide a reference to you if you seek a new job in this field or a related field? Can they recommend you internally for any open positions?

Often, the path out of an unwanted early retirement back into your old career path is through an old contact. That personal connection matters, both between you and that person and between that person and the job you may be able to get.

Consult or freelance

If you want to stay in your current field but there aren’t any employment opportunities available to you, consider using your skills for freelancing or consulting work. While this may not be the outcome you desire, as freelancing and consulting work comes with fewer professional benefits, it does allow you to keep your feet in the field and keep income coming in.

If you’re looking for quick and very simple freelancing opportunities, consider looking at Fiverr, which will provide small but simple freelancing jobs. For more challenging and more lucrative opportunities, take a look at Upwork. You may also want to look at any consulting opportunities with previous employers as a starting point.

Evaluate your skills

If you don’t have any such opportunities available to you, this may be an opportunity to step back and evaluate your skills from the perspective of considering what fields might actually be a good fit for you. What fields are open to you with the skills you’ve acquired in your previous career?

For example, although I was once in the data mining profession, I spent a lot of my professional time on documentation, report writing, and communication with collaborators. Those skills set me up for a new career path as a freelance writer.

Step back and look at the skills you’ve accumulated and ask yourself what career paths those skills might be a great fit for. You might find that the things you’ve learned lead you to a completely different destination.

Start a new career

If it appears as though your old career path is a dead end, it may be time to consider a new career entirely.

A good first step here is to take some skills assessments. Minnesota State University provides a great list of skills assessments for people considering a career path. These will often clearly illustrate what natural talents and skills you have and can point you toward some careers you might be suited for.

From there, you can assess some entirely new career options. Do you need further education? Do you need to go to a trade school? Maybe you just need to do some independent learning.

Downsize your lifestyle

From a practical perspective, unexpected forced early retirement likely means that you need to downsize your lifestyle. In the short term, you likely made a bunch of easy decisions about your spending choices, but if this is a more permanent change or one that will last years, you should start considering bigger changes.

Start with housing. Can you move to a smaller home or into an apartment? Can you share your living space with someone else in order to offset some of the costs? For transportation, do you need a car or can you get by with mass transit options, bicycling, and/or carpooling? Do you need a data plan for your cellphone? What about cable?

When you chop away a bunch of bigger expenses, suddenly the challenge of figuring out how to financially make it on a lower income becomes much easier.

Recalibrate your investments (if you have them)

If you’re fortunate enough to have investments put aside for retirement, the moment at which you’re forced into early retirement is a moment to consider recalibrating your investments into “retirement mode.” The reason is that, in effect, you’ve become a retiree who wants to be able to live off of those investments for as long as possible, and thus retirement requires a different investment strategy than trying to grow wealth over the long term.

How does a retiree approach investing, then? Someone who is more than 10 years from retirement doesn’t plan to withdraw anything over that period, so they’re likely invested in a very aggressive way. A fresh retiree will likely need to make withdrawals in the next 10 years, so that money should be invested in a more stable fashion with less volatility.

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