Good afternoon. First let me reference my message of February 2nd –
“Since mid-October of 2019, US markets have risen steadily, setting record highs almost daily. It would be perfectly normal for US stock indexes to correct 10 – 15% to the downside after such a move, even without the coronavirus providing fuel to the fire. We began preparing for a correction several weeks ago, trimming positions and raising cash in client accounts. Most clients have between 20 – 30% of account values in cash currently.”
A correction has begun driven by fear of the corona virus and the effects of wide scale disruption in the global economy. The S&P 500 is down 7.61% from its closing high of 3886 on 2/19/2020. It’s been quick and sharp, and there should be more to come.
I’m going to focus on what I know-
The market needed to pull back, and I don’t think it has found a bottom yet.
The news cycle will likely get worse before it gets better.
Globally, governments will do everything possible to get economic activities back on track.
At some point this is a buying opportunity. Our list is always ready.
Attached is the latest edition of Ned Davis Research Market Digest, February 2020, “Coronavirus’ Impact”. It is a great read, and I agree with their conclusion the global economic rebound has been delayed, not derailed.
Do not hesitate to call if you feel the need.
Carlton
