April 20, 2020

Good Monday morning,

The U.S. equity markets posted another two-week winning streak in the S&P 500 with a powerful rally last Friday.  News of possibly reopening of the economy and successful trials of coronavirus treatment drugs pushed the Dow, S&P 500 and the NASDAQ  up 704.79 (2.99%), 75.01 (2.68%) and 117.78 (1.38%) points, respectively.  The growing availability of mass rapid testing also seems to be a key driver of our economic recovery.

Protests broke out in several cities across the nation demanding the various Governors reopen their economies and get business back to work.  There is no doubt this is a growing concern, especially with some parts of the country affected far less by the Coronavirus than others. 

In the pre-market, the Dow has been down as much as 500 points as the price of crude oil is in near-free fall, losing almost 40% today, at prices we haven’t seen since 1999.  Not only is oil production a concern, but also is storage as the demand for petroleum fuel has plummeted since the shelter in place order was given about a month ago in most parts of the country.

Weighing heavy on the markets is not only the timing of reopening parts of the economy, but how it will be reopened.  Over the weekend, the Trump administration presented its three-phase plan for reopening the economy at the national level.  As for California, Gov. Newsome has yet to extend the May 3 shelter in place order, although it is widely believed that date is likely to be extended to at least May 15.

Market volatility is here to stay – at least for now.  Investors should try not to react to the daily swings in the markets, and most of all avoid making rash investment decisions solely based on current emotions.  That is when we need to talk!

Stay safe and healthy.