posted by: Radnor Financial Advisors
As you may be aware, there have been a few positive days for stocks (and bonds) over the past week. The S&P 500 posted a 3-day gain of 17.6% last week, reacting positively to a combination of a $2.2 trillion fiscal stimulus package and expanded monetary stimulus from the Federal Reserve.
Despite the recent rally, there is still a lot of fear out there. The spread of the coronavirus continues to have both health and economic concerns, as the number of cases in the US (and globally) continues to grow. Many states have shelter in place orders for all but essential employment. On March 29, the federal government extended social distancing guidelines through April 30th. These changes will have a significant impact on economic growth, as evidenced by the record 3.3 million US workers applying for unemployment benefits last week.
Over the next few weeks, it is certainly possible that the markets will re-test their March-lows, depending upon the progression of the virus. Investors should maintain discipline and patience, looking past short-term market fluctuations and focusing longer-term. Hopefully by Q4 we will be on the other side of this uneasy environment and the recovery process will be underway. While the slow-down of economic growth felt like someone turning off a light switch, the recovery may feel more like turning on an old fluorescent light, flickering and taking a little while to heat up to full brightness.Important Disclosure Information