U.S. and Foreign equities markets closed modestly down Friday, with Gold and 10-year treasuries providing a lift for individuals with well diversified portfolios.
Q1 Earnings reports continued this week with COVID-19 driving significant variation from the norm for many companies –Delta Airlines reported a quarterly loss in Q1 while expecting a 90% decrease in revenues in Q2 and Netflix reported a significant increase of new subscribers.
The U.S. Federal Government worked towards a second stimulus bill, with more payments being made available to small businesses as a result. Meanwhile some large publicly traded companies came under scrutiny for tapping into the first round of subsidized business loans, and some such as Ruth’s Chris Steak house, and Shake Shack, have said they will return their loans to the Federal Government.
S&P 500: 2836.7 (-1.3%)
FTSE All-World ex-US(VEU): (-1.0%)
U.S. 10 Year Treasury Yield: 0.60% (-7.08%)
Gold: $1,727.08 (2.6%)
EUR/USD: 1.082 (-0.5%)
- Monday – Futures prices of oil crumbled into negative pricing as contract sellers attempted to offload contracts that would force them to take possession of the commodity.
- Monday – President Trump announces plan to halt immigration into the United States as a result of COVID-19.
- Tuesday – Netflix reports a surprise increase in new customers, more than double their Q1 forecast at 15.8 million new customers.
- Wednesday – Delta Airlines reports a quarterly loss in Q1 and sets expectations of a 90% decrease in revenues in Q2 2020.
- Thursday – Labor Department reports 4.4 million additional applications for unemployment benefits from last week. Total fillings have now reached over 26 million over the last 5 weeks.
- Friday – Another stimulus bill was expected to be signed into law by President Trump, positioning nearly $500 billion aside for business loans including specific amounts for hospitals and smaller, local, lending groups.
Our Take: The Fundamentals of Why We Take Risk
The full impact of the Coronavirus remains a substantial unknown, and with another week passing it seems that uncertainty has become a greater constant in all our lives. How long will my work situation be this way? When will I be able to go to a restaurant, or a sports event? How will this impact the economy, and by way of that, my retirement?
This uncertainty has caused one of the most volatile reactions in the stock market in living memory, but there’s a large positive that’s worth reminding ourselves of: while the world will not go unchanged as a result of this new virus, people across the world will still look to improve their personal standing.
This bodes well for the global economy in the long run and is an excellent grounding concept amidst these uncertain times.
That said, many still question what they should be doing with their investments. Is now the right time to invest? What stocks are best positioned to succeed in this market?
Rather than spinning your wheels on these questions that cannot be definitively answered, focus on what you can control. Specifically, risk – taking risk is what provides investors with the potential for return. No risk, no reward, or otherwise said, no pain, no gain. This year, taking risk has been painful, but we believe as long as people across the world work to improve their personal standing, they, and the companies they work for, will be rewarded for taking risks with growth in value, and their investors along with them. All it is, is a matter of time.
We hope you stay safe and healthy as we all weather these unusual times.