The rebound continued to gain steam yesterday, led by Health Care and Tech, gaining 4.67% and 4.23% respectively. Next on the list of sector gainers were Consumer Staples and Utilities. While capital is being put to work, it continues pile into the more defensive sectors. Technology while not typically “defensive” has outperformed on a relative basis to the overall market.
Today is the last day of Q1. It’s amazing how fast time passes when you are having fun. 90 days ago, the world looked very different, we remember reading dozens of Year and Decade ahead pieces and not one mentioned this as a possible risk, including ours. Black swan events are always the biggest risks for investors. They come as a surprise and with major consequences. While the U.S. election and trade war took up the majority of the focus for the ‘year ahead’ both seem to be of little significance at this juncture. QTD, the S&P 500 is down 18.7% and the TSX is down -23.59%. This would be the worst quarter since 2008. When you factor in the big fall for the loonie, U.S. returns are significantly better, ‘only’ falling -10.83%. Looking back at the quarterly returns was also a stark reminder that bear markets can drag on for prolonged periods of times. Back in 2008 we saw six consecutive quarters in the red.
Needless to say, this quarter was characterized by the unprecedented, on all sides. The first half of the quarter saw new all time highs. The second half of the quarter witnessed the end of one of the longest bull markets in history, replacing it with the fastest bear market. Society has purposefully pushed the economy into a sudden recession to fight a global health issue. More stimulus than believed possible, an oil war, the list goes on. Glad that quarter is over.
While green for most of the early morning, stock futures have slipped as we near the open. No real news to cause for concern, except the consistent drip of negative news concerning the spread of the coronoavirus. It seems some days the markets care, and others it doesn’t. New York reporting a 16% increase of deaths in six hours
and talks of extending lockdowns in Italy certainly don’t help.
Ford and General Electric pair up to produce ventilators in the US. The auto giant is collaborating with GE’s healthcare division to produce 50,000 over the next 100 days
. One is already being used in New York. While it’s admirable that the company is stepping up in a time of need, it’s unfortunate that they have delayed North American production indefinitely. They just cancelled plans to restart factories in Mexico and the U.S. over the next two weeks.
With ad budgets way way down (and advertisers themselves shutting down), the Coronavirus is a media extinction event
. A cruel irony of the pandemic, is that while journalists may be performing an essential business, the business of journalism is facing an extinction-level threat.
Donald Trump is considering expanding the travel ban. The US president said yesterday that travelers from China, Europe, and Iran remain blocked from entering the US, “and we may add a few more
.” Canada and Mexico have already agreed to reduce border crossings to the US. Diversion
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