THE RECORD RECOVERY?
In less than 6 weeks investors have seen multiple records broken both globally, and in the U.S. The S&P 500 entered a bear market in record time, recorded weeks of record-breaking volatility, and this week, set record gains off of Monday (03/23/20) lows including a record-breaking 1-day gain on Tuesday (03/24/20) of 9.4% - the largest in over a decade.
COVID-19 has continued affecting our daily routines this week, and its economic impact remains unclear; however investors have finally benefited from the chance to rebalance – that is, selling fixed income and cash positions, and re-investing into stocks at prices not seen since the 2008 financial crisis over 11 years ago.
IS THE RECOVERY REAL?
On March 23, the S&P 500 set a closing low of 2237. In just 3 days since then, the S&P 500 charged 17.5% higher. On Tuesday and Wednesday alone, the S&P 500 blew through technical resistance levels on heavy and increasing volume, notching an 11% gain in 2 days. This morning, technical indicators suggested the trend would continue, and it did, with the index posting over 6% in today’s session alone. While the short-term will likely remain volatile, the strength of this week’s upward move suggests a bottom was set on March 23, 2020. By the end of March, 2020, we expect pension funds, endowments, and other large institutional players to re-balance into equities, as they maintain their allocations into a new month – likely rendering stocks another round of gains.
Today, BOULEVARD began moving out of cash, bonds and gold, and into equity holdings. We are a strategic firm emphasizing consistency of overall results, but recognize the tactical opportunity these record market moves represent for our clients. While COVID-19 and its economic impact may take quarters to resolve, we expect investors to see equities point towards intermediate economic recovery and long-term growth.
Not an offer to transact any securities, and not a financial planning engagement
Advisory Services through Boulevard Wealth Management, Inc. (dba BOULEVARD), a Registered Investment Advisor. Information provided has been prepared from sources believed to be reliable but is not guaranteed and does not represent all available data necessary for making financial decisions and is for informational purposes only. BOULEVARD and its representatives do not offer tax or legal advice through BOULEVARD. Please consult the appropriate advisor.