March 27, 2020

Good Friday morning,

Investor fear and demand have driven the U.S. stocks into a bear market this month faster than any other time in history, and from last Tuesday to yesterday rallied markets into a bull market, also faster than any time in history.  In the three trading sessions from March 24 – 26, the Dow gained 3,960.24 points, or 21.3%.  Yesterday alone, the Dow, S&P 500 and NASDAQ gained 6.38%, 5.60% and 6.25%, respectively, fueled primarily by the optimism from the economic stimulus bill passing through the Senate.

We wake up this morning to the news that the economic stimulus bill may get delayed in the House (over how the vote will be taken), and the Dow is responding accordingly by declining close to 1,000 points.  We are likely to find out later today if the House is able to take a roll call vote, or if it required that each Representative come to Washington DC to vote.  If so, that is likely to push the vote to Saturday or Sunday.

This week’s stock market rally sheds light on the reality that a full market recovery will come only after considerable volatility – in both directions – declining with fear over the spread of the virus and rallying with success of its containment.  This recent rally also showed investors that recovery will come, eventually, and that computer-generated trading will provide the vast majority of the rapid ups and downs in the market.

Our hope is that by Sunday evening, March 29, the House will have voted on and passed the economic stimulus bill, and that it went to the President for signature.  President Trump has vowed to sign it upon receipt.

Have a great weekend, stay home and be healthy.