As measured by the S&P 500, U.S. stocks have bounced — and what a rebound it has been — 22% from the March 23 low, which was only 12 trading days ago. That’s madness, but at least we’re heading in the right direction. But where do we go from here? Is this a bear market rally, or will the market keep rising? I need more information to make that call. I’m hopeful but unconvinced.
My next key data point is the quarterly reporting season that begins in about two weeks. That’s when most public companies announce their financial results for the three months ended March 31 and, more important, give guidance for the June quarter and perhaps even for the rest of 2020. As to their forecasts, what can managements possibly say that’s constructive while the coronavirus continues to stall a significant portion of our economy and that of our major trading partners?
Nonetheless, I see some winners in my tech sector. There are even a few stocks that are up in 2020, with the S&P off 18%. I also have circled names that are well-positioned for the post-coronavirus world in which we’ll move further away from analog businesses and double down on digital companies. Right now, I’m dabbling in a few tech stocks, but I won’t be all-in until I have a better understanding of the coronavirus-related risks to our economy and specifically to my covered firms. Believe me, when I think that the coast is clear, I’ll be fully invested in my risk-on stocks led by semiconductors because they always lead tech investors into and out of trouble when the economy shifts.
Please stay tuned. In the meantime, reach out to me with questions, comments, or requests for further data. We’re in flux, and you deserve updated information.
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