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Market Update

This week will end up going down as the worst week for the stock market since the market crash of October 1987. The speed of which the market has pulled back has been hard to digest, especially in light of the market reaching an all-time high milestone just last month. Our economy went from a position of strength and growth to a position of panic and recession in a matter of weeks. Adding to the burden felt by these pressures is that all our lives are being impacted directly in one form or another. I wanted to touch base with you regarding where we stand today. I’ve spent many hours on the phone with most of you over the past few weeks so please forgive me if any of this information sounds redundant.

The economic impact of the market is unknown. The duration of how long we will be dealing with this virus in an unknown. Therefore it makes determining the true value of an investment a guessing game. This uncertainty and lack of clarity is the main culprit behind the weakness in stocks. There has also been some sense of panic as well and when coupling these things together, one can see why we’ve seen a quick rush to cash over the past two weeks. This desire for cash is why safe havens, such as bonds and gold, are also negative for the month.

On the attachment that I’m including as part of this email are a few different scenarios in which a bull case, a base case, and a bear case is laid out in terms of how earnings are going to be impacted this year. When we entered the year, the consensus estimate for the S&P 500 was an earnings growth of 175.98 which reflected the growth of 8% year over year. That obviously is no longer the case. The scenarios for where the market could go from here based upon different circumstances are attached.

We appreciate your trust and confidence in us, especially during a difficult time like this. If you have any questions or concerns, please feel free to reach out to our team.

 
CLICK HERE FOR THE MARKET UPDATE OVERVIEW

 

Best Regards, 
Lance Powers, Portfolio Manager
Partner

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