It was an awful quarter for the financial markets, but, of course, that’s less important than the toll that the coronavirus has taken on lives worldwide. The S&P 500, the bellwether for U.S. stocks, was -20%, although it had been -35% from its high on February 19 to its low on March 23. History-making stuff. Unfortunately, it looks like near indiscriminate selling has returned at the beginning of the June quarter.
The market is a discounting mechanism. Securities prices immediately reflect the knowns. I think that U.S. stocks are priced for horrific coronavirus losses over the next few weeks. President Trump and his medical advisers even have mentioned the potential loss of 240,000 American lives. God help us. Although that’s a scary figure, particularly since the coronavirus “only” has killed about 44,000 globally thus far, it’s now public data that has been absorbed by the market. In my view, a durable recovery – fits, and starts don’t count — in stocks won’t happen until we’ve seen peak coronavirus pain. I pray that that’s in April more so for the sake of humanity than for the catalyst for the next bull market.
Like you, I’ll be following the coronavirus reports for that peak so that we all can see the other side. Perhaps unlike you folks who aren’t investment nerds, however, I’ll also be reading about and listening to everything that corporate America has to say about current business conditions and for what they see for the rest of 2020. Stocks can’t meaningfully and consistently rally until earnings expectations are slashed to fully reflect coronavirus reality. These “confessions” should come in late April through early May, so stay tuned.
Investment Advisory Services offered
through Independent Solutions Wealth Management, LLC, an SEC Registered
All opinions expressed Paul Meeks are solely Meeks’ opinions and do not reflect the opinions of Independent Solutions Wealth Management, LLC (“ISWM”). You should not treat any opinion expressed by Meeks as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion for educational purposes only and does not constitute investment, legal or tax advice, an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. Meeks opinions are based upon information he considers reliable, but neither ISWM nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Meeks, ISWM, its affiliates and/or subsidiaries are not under any obligation to update or correct any information provided on this website. Meeks statements and opinions are subject to change without notice. No part of Meeks compensation from ISWM is related to the specific opinions he expresses. Past performance is not indicative of future results. Neither Meeks nor ISWM guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. Before acting on information, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from an investment adviser.