Stock markets surged back in April while we struggle with pandemic updates. Major indices climbed over 12-15% and are still down an average of -12% YTD. The leading sectors YTD are health care and bonds. The overall leaders this year are the big tech stocks. This coronavirus may have been the trigger that flipped an economic cycle already set for an end and new beginning.
With you we watch for signs that recommend increasing stocks in your portfolio. Markets bottom before bad news peaks; they anticipate news and price it in. So while the news continues scary, the 1st QTR market drop may have already priced in tomorrow’s bad news. Stock prices may have hit their bottom in March. The April continued rebound in stocks suggests belief that the pandemic may be controllable. Missteps in the next few months would undo everything. The economy has a long road to get everyone back to work and recovery. The bounce in stock prices says the markets expect a short recession. Investors base this largely on the extraordinary actions of the Federal Reserve. We see reason for optimism but not certainty.
Slo-mo spring. T.S. Eliot is right, April is the cruelest month. The season that started so bravely stalled and sputtered. Few warm days to cheer the pallor of concern and dread and grief for familiar routines and connections. It takes discipline, making your own sunshine, staying in the present, not projecting forward or longing for the past, finding a way to be useful, to be the shelter you seek.
