News

While a welcome rally, we are still not out of the volatility yet and investors should stage into the market with caution.

We think it is time to start “averaging into” stocks, as it appears the market is starting to now differentiate between the stocks and sectors which will face major problems for an extended period and those which are relatively immune.

It does appear the market is starting to now differentiate between the stocks and sectors which will face major problems for an extended period (e.g. retail/ tourism / airlines / property trusts), and those which are relatively immune and / or benefit e.g

Global markets were higher overnight, even as weekly US jobless claims surged to 6.65 million people in the week ended March 28, as businesses closed around the nation to try and mitigate the coronavirus.

Global markets started the quarter with a sell-off, with the US markets down (S&P 500 index – 4%) after US officials reported covid-19 could kill 100,000 to 240,000 Americans.

The US market, measured by the S&P 500 ends the 1st quarter of 2020 down -20%, making it its worst quarter since the 2008 GFC. The Dow Jones index closed the quarter down -23.2%, its worst since 1987, as the covid-19 pandemic wreaks havoc around the world

The Australian market surged +7% on the back of a massive $130bn government support package. 

Despite the Friday dip, US markets were the strongest in 10 years last week as they staged a partial recovery from recent lows after the announcement of a $2 trillion US stimulus package.

While the medium-term outlook appears somewhat promising with heightened levels of stimulus, investors are still treading with caution towards given the risk to earnings near term. Most analysts are expecting a 25% – 30% drop in US corporate earnings in 2