Stock market slides over a few days or months may lead investors to anticipate a down year. But a broad US market index had positive returns in 15 of the past 20 calendar years, despite some notable dips in many of those years.
How do you eat an elephant? With daily briefings from the White House Coronavirus Task Force and state Governors, emergency meetings held by global Central Banks, and weekly conference calls from equity strategists and economists across the major Wall Street asset management firms, GDP and Earnings forecasts are being revised faster than information can realistically be consumed and properly analyzed by bottoms up investors.
Disruptions to Daily Life Accelerate Over the past few weeks, the lives of ordinary Americans have been disrupted by the temporary closure of businesses, colleges and public schools, museums, theme parks, restaurants, bars, gyms, community centers, music venues and festivals, live TV studio audiences, professional sports, public transportation, and other activities that result in gatherings of 10 people or more.
On Tuesday March 3, 2020 the US Federal Reserve instituted its first emergency inter-meeting interest rate cut since the collapse of Lehman Brothers in the fall of 2008. This latest reduction brings the target Federal Funds rate to the range of 1.00%-1.25%, from the previous range of 1.50%-1.75%.
In light of the recent market pullback following the continued spread of the coronavirus (COVID-19), we felt it worthwhile to remind investors that the medium and long-term impact of the virus will have little impact on the valuations of US and International businesses.
Market volatility has been a consistent investment theme of ours now for the past 2 years, and the confluence of last week’s headlines has only helped perpetuate the matter, leading to a market decline of 3% since the January 17, 2020 closing high of the S&P500.
This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.
Dear Friends, Merry Christmas, Happy Hanukkah, and Seasons Greetings to you and your families!
Last month, following the July 31 Federal Open Markets Committee‘s (FOMC) decision to cut interest rates by 0.25%, we sent a Special Market Update describing the Fed’s return to monetary stimulus, and described how this type of action was meant to protect the US economy from the risk of a recession.
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Over the course of a summer, it’s not unusual for the stock market to be a topic of conversation at barbeques or other social gatherings.