Quarterly Investment Outlook
April 6, 2020
As this quarter ended, we all endured a month with some of the worst and best single days in stock market history. The S&P 500 was down 24% from its February 19th record close and down 20% so far this year- even with the rally mid March in which the S&P 500 recorded its largest weekly jump since 2009. In terms of the scale and scope of market and economic damage, there is no historical parallel, in such a short time frame.
During the 31 days of March, a record number of workers filed for first-time unemployment benefits. The Federal Reserve made not less than 20 announcements related to policy actions to support the economy, and Washington enacted a $2 trillion economic relief package, with potentially more fiscal support yet needed.
Yet, to put this into perspective, you are likely to find your portfolio – adjusted for withdrawals and deposits- was valued on March 31st similarly to where it was just over a year ago at the beginning of 2019. It would be comforting to say that the worst is over for our markets, but to my mind, there is still too much uncertainty ahead. COVID-19 may well still be in the early stages of spreading in the U.S. and globally. Until cases begin to decline in the U.S., we will have little visibility on where the economy and stock market goes from here.
Given the strength of the economy before this health crisis, however, some economists believe that once we do have visibility, our economic recovery could be fairly fast and strong. To my mind, America’s greatest strength has always been its flexibility and resiliency. We have come together and solved seemingly insurmountable problems time and time again, and in the process, we have always created new opportunities too. I truly believe we will do this again and emerge stronger for our efforts.
We are monitoring the economic data and the markets diligently to keep you well-positioned for those positive days ahead. We will be watching for those new opportunities and will incorporate them into portfolios.
In the meantime, we are trying to stay connected in many different ways and we urge you to do the same. You’ll be hearing more regularly from me and my team, and we are available to you by phone, email or video chat, as you prefer. You can find us on our website blog and social media as well. We want to stay touch!
Let me end this letter by sharing our recent bright spot at Summit Place. With love and optimism for the future, we welcome Patrick Vincenzo McLane, born March 30th, 2020. Susie is doing well, and everyone is home and healthy.
Please stay safe and secluded. If there is anything we can do to support you and your family, please let us know.