Macro & Market Matters - May 14

Portfolio Manager Jack Janasiewicz discusses how the near-term market picture has been affected by COVID-19 and what an economic restart might look like.

  • Federal fiscal and monetary measures taken in response to COVID-19 have helped to blunt the immediate economic shock of the lockdown. In addition, the sectors most negatively affected by the lockdown represent only about 7% of the S&P 500®. Sectors that make up approximately half of the S&P 500® have been less affected, with many able to operate at closer-to-normal levels in the “stay-at-home” economy.
  • While the risk of a “second wave” of cases is significant, frontline US healthcare workers have demonstrated strength and resolve in the face of COVID-19. They have proven able to keep fatality rates relatively low across the majority of cases and are well-positioned to continue providing treatment over the near term. Reopening across the US will be a slow process, but will incorporate new innovations in behavior designed to protect hygiene and limit the spread of the virus.
  • As of mid-May, early evidence of a gradual reopening in the US includes upticks in airline traffic, road traffic, and consumer spending. Market surveys suggest individual investors remain bearish, while institutional investors and financial professionals appear bearish-to-neutral on the near term. The level of confidence among consumers and business leaders will be key in the months ahead.
This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. The analyses and opinions referenced herein represent the subjective views of the speaker(s) as referenced as of May 14, 2020 and are subject to change.

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