Markets see-sawed this week as cases of Covid-19 spiked in certain states around the country. As local economies re-open I think it's fair to expect an increase in cases. Everyone will obviously be watching the impact that this takes on the healthcare system--but also it's affect on government policy. Will this cause governors to re-think the loosening of distancing restrictions for businesses? The summer months may provide an indication if we will have a gradual re-opening or a disjointed open/close/open status.
Thursday so the Dow's largest sell-off since March. Friday saw a small bounce in the other direction. I would expect more volatility to come.
Here's my weekend reading:
Market sentiment has been focused on an optimistic V-shape recovery.
Cautious tones from economists and a rise in virus cases is shifting sentiment.
We continue to expect a U-shape recovery and increasing market volatility.
- Because this economic decline is policy driven, a solid recovery is likely as lockdowns end.
- Easy monetary policy, aggressive fiscal policy and zero-bound interest rates should continue to support equity markets.
- Upgrading fixed income allocation is important as rates are likely to remain lower for longer.
- As the economic fallout from COVID-19 threatens peoples’ livelihoods and erodes their short-term savings, it follows that their long-term financial security is also at-risk.
- If we want to provide millions of American workers with a secure retirement, we must focus our efforts on creating new, modernized solutions that seek to provide the opportunity for guaranteed income where employees are already saving.
- Behavioral finance must also be addressed inline with investments offerings
Have a restful weekend.