Watch the CPK Market Action Report: May 2020
Markets are rebounding as the Federal Reserve takes unprecedented action to stabilize markets and investor’s fears. Will a flattening of the curve and positive news for a treatment or vaccination indicate the worst is behind us?
Watch the full 3-minute Market Action Report now:
May 2020
Stocks rebounded sharply in April, fueled by a flattening pandemic curve and positive results from the clinical trial of a virus treatment.
The Dow Industrials, which had dropped 14 percent in March, jumped 11 percent. The S&P 500 rose nearly 13 percent, while the NASDAQ Composite led, surging more than 15 percent.[i]
A slowdown in COVID-19 infections allowed stocks to turn higher, while a more stable bond market also helped support the rally.
Momentum stalled a bit as oil prices dropped. But gains accelerated as the month progressed as more states began talking about reopening their economies.
In the coming weeks and months, as the national dialogue shifts toward restarting the economy, two key factors may help investors gauge the pace of the recovery.
The first could be each state’s actions. The White House has rolled out a three-step plan towards a full reopening, but it leaves the ultimate decision-making to the governors of each state.
The second factor could be public sentiment. How soon will people be returning to an office to work, going out to eat, and traveling again? That remains to be seen.
For the month of May, all my equity models are still 100% cash. Although we have seen some significant gains in specific stocks, my indicators are still not showing it is time to re-enter the equity markets.
Anytime you see unemployment soar to our current highs, you must realize that even in a best-case scenario, it will take a long time to get everyone put back to work. Unfortunately, many Americans may not be able to return to their jobs or restart their businesses leaving them uninsured and struggling to just put food on the table.
As companies and individuals alike struggle to survive this horrible event, I find comfort and reassurance in the good deeds of Americans all across this great land lending a helping hand where they can and standing down when opportunities present themselves for someone who is in greater need than they are.
As a reminder, my current allocation is not a recommendation. I still expect heavy volatility to continue for some time. Successful navigation through this environment will definitely require a fluid plan with all hands-on deck.
Regardless of what happens next, investors like you need to have a simple and yet solid financial plan that reduces RISKS, COSTS and TAXES while securing the necessary income you need to maintain your lifestyle throughout retirement.
If you don’t have a plan OR you’re not comfortable with the plan you have, call me today to get pointed in the right direction.
I’m Chad Kunc and that puts a wrap on the May 2020 Market Action Report. Thanks for joining me. It’s time for me to get back to the markets.
And that action starts, NOW!
Toll-Free: (866) 521-7526
SOURCES:
[i] The Wall Street Journal, April 30, 2020