This was another bad and excessively volatile week for the markets with the S+P and the Dow losing roughly 9% and 11% respectively. The 10 year Treasury lost value this week, ending with a yield of 0.95%.
The oil price war, along with the coronavirus, did not help the markets. The market ended the week on a high note after a state of emergency was announced, along with the promise of more test kits. The house has passed a relief bill, and we can hope some good legislation comes out of Washington soon.
As I said in a previous email, my most current economic concern is the impact the shutdowns will have. In particular, I am concerned about small and mid-sized businesses. Many small businesses do not have the cash reserves to shut down for a couple of weeks, let alone a couple of months. So far I have heard stories of slowing sales from everything to massage therapists to dentists. The bill that was passed by the house promises, “that in no way will Small Businesses be hurt.” This bill has not been finalized and I do not know how they will accomplish that, but I hope they do.
If the promised test kits are provided, we will know far more about the spread of the virus and hopefully its health impacts in this country. There is still a ton of uncertainty and we are going to remain cautious with our portfolios.
As always, please don’t hesitate to contact us if you have individual concerns.
~ Alex Parrs