FINANCIAL MARKET UPDATE 3.31.2020

STORY OF THE WEEK

personal finances: focusing on what you can control

GUEST AUTHOR: JUSTIN VOSSEN, CFP®, NAPFA, INVESTMENT ADVISER & PRINCIPALL

Like many of us, you may feel a bit disoriented, fearful, and anxious. Not only has your life been dramatically altered in the past few weeks, but the market continues to drastically swing every day. The uncertainty of it all is perhaps the most difficult thing to comprehend. While nobody has answers, we can be sure of one thing; mankind has focused all of its resources on one problem. One can hope that with a dedicated effort, positive change is on the horizon.

The disruption to the financial markets and economy is a difficult thing to gauge. Globally, many governmental programs are focused on mitigating the damage in the near term by stimulating their economy in various ways. This stimulus will provide a lubricant for the financial system in order to continue to function as normally as it can.

There is little question that there will be a recession. We have already dipped into a bear market as fast as we have seen in history. Since 1926, the average bear market lasted 22 months, while the longest bull market lasted 9 years.  Bull markets follow bear markets, and much of the recovery typically comes in the front end of the bull market.

WEEK IN REVIEW

  • On Friday the House approved the CARES Act, which was quickly signed by the President. The rescue package is designed to provide support to the economy that has been damaged by the coronavirus fallout. The $2 trillion stimulus will be the largest in history, and roughly doubles the stimulus package used during the financial crisis. Support measures from the bill include increased unemployment benefits, direct payments of $1,200 to individuals, small business loans, and support for large corporations, hospitals, and local governments (among other items).
  • Last Thursday the weekly publication of initial jobless claims garnered significant headlines. This weekly measure represents individuals who file for unemployment benefits for the first time. The figure had been hovering around multi-decade lows just a few weeks ago, but jumped to the highest level ever. At 3.3 million, the recent reading dwarfs the peak during the financial crisis of 665,000, as well as the all-time record of 695,00 in October 1982. The spike in jobless claims is a testament to how abruptly the response to the coronavirus has slammed the breaks on economic activity.
  • Additional economic data to be published during the week may begin to reflect the impact of the coronavirus on the economy. On Wednesday we will get an update on manufacturing activity for March. On Friday we will get the Jobs report, as well as an update on services sector activity for March.

HOT READS

Markets

  • Trump Signs $2 Trillion Coronavirus Relief Bill As The US Tries to Prevent Economic Devastation (CNBC)
  • China’s Coronavirus-Battered Economy Shows Tentative Signs of Renewed Life (WSJ)
  • Larry Fink Says Economy Will Recover From Coronavirus, ‘Tremendous Opportunities’ in Markets (CNBC)

Investing

  • We Can’t Prevent Market Panics. We Can Control How We React. (Zweig)
  • A Short History of Dead Cat Bounces (AWOCS)
  • Three Reasons Its Not 1929 (The Reformed Broker)

Other

  • Even If a Restaurant Worker Coughs Or Sneezes Directly In Your Food, You Won’t Catch Coronavirus From Eating The Meal (Business Insider)
  • 15 Best Work From Home Tips During the Coronavirus Pandemic (Prevention)

ECONOMIC CALENDAR

Source: MarketWatch

MARKETS AT A GLANCE

Source: Morningstar Direct.

Source: Morningstar Direct.

Source: Treasury.gov

Source: Treasury.gov

Source: FRED Database & ICE Benchmark Administration Limited (IBA)

Source: FRED Database & ICE Benchmark Administration Limited (IBA)

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ABOUT THE AUTHOR

402.763.2967

jjenkins@lutz.us

LINKEDIN

JOSH JENKINS, CFA + SENIOR PORTFOLIO MANAGER & HEAD OF RESEARCH

Josh Jenkins is a Senior Portfolio Manager & Head of Research at Lutz Financial with over nine years of investment experience. He is responsible for assisting clients in the construction, selection, and risk assessment of their investment portfolios. In addition, Josh will provide on-going research and trade support.

AREAS OF FOCUS
  • Asset Allocation & Portfolio Management
  • Investment & Market Research
  • Trading
AFFILIATIONS AND CREDENTIALS
  • Chartered Financial Analyst (CFA)
  • Chartered Financial Analyst Institute, Member
  • Chartered Financial Analyst Society of Nebraska, Member
EDUCATIONAL BACKGROUND
  • BSBA, University of Nebraska, Lincoln, NE

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