4/2/20 Market Notes
As we are all adjusting to a new normal that resembles scenes from an Alfred Hitchcock or Stephen King movie, there are positive signs to be observed. Across the street from my home is a nursery, which is receiving its annual deliveries of plants, flowers and trees, and on this sunny spring morning, I’ve observed several joggers passing by. In other words, the sun is still rising from the east and many people are developing new routines. There will be, and already is, an economic toll from all of this, but that too will level off and hopefully the recovery will be swift as many predict. With regards to the stock market, that too will recover – history tells us that on average it takes three and a half years from the bottom to test new highs. The optimist in me is viewing this as an opportunity to make a 40% gain from current levels over the next few years. And while history is no guarantee of future performance, and no one can be certain of what lies ahead, I do feel that the human spirit will prevail, and that we will look back at this period in time as challenging, transformative and ultimately as strengthening.
The first day of the second quarter wasn’t particularly encouraging, as market participants continues their indiscriminant selling across all sectors of the S&P. The Utilities sector fared the worst, sinking 6.12%, followed by the Financial sector which declined 5.97%, Consumer Staples held up the best, falling 1.83%. On a broader market basis, the Dow Jones Industrial Average declined more than 1,000 points, as the NASDAQ and S&P 500 has a similar 4 ½% decline. The U.S. dollar was a smidgen higher, as was gold, while the benchmark Ten Year Treasury Yield declined to 6.11%. Oil prices rose nearly 3% and are up another 10% overnight as President Trump attempts to broker a truth between Russia and Saudi Arabia, whose feud is a main cause for the rapid and steep fall in oil prices.
As March economic data begins to be released, the grave impact of the economic shutdown we are all experiencing is being seen. Virtually all reports are reflecting a sharp contraction in activity. However, some data is not as bad as many though, providing some signs of hope that many businesses are pushing onward and making the best of the situation.
Disclosures: This market commentary is written by the 1879 Advisors® and represents the views of 1879 Advisors®. This commentary is not investment advice and should not be used as a basis to make investment decisions. Please consult with your registered investment advisor before making any investment decisions.