Our hearts continue to go out to everyone during this tough time.  Fortunately, early glimpses of light are illuminating the end of the tunnel.  We have seen both things I believed had to occur in advance of the markets finding some footing: two consecutive solid “up” days (March 24th and 25th), and good news on the medical front.  Last week the S&P 500 jumped up +12%.  So at this point our relative “bottom” of the current downturn occurred on March 23rd, only a few short weeks after the all-time historic high on February 19th.  The markets have never fallen so far so fast, thus the sharpness of last week’s rebound is not surprising.  News of planned business re-openings on the West Coast and a flattening of medical numbers in New York is very welcomed.  Companies like Starbucks, Apple, and Nike have re-opened stores in China, and have shown promising recovery numbers.  Europe and the U.S will follow.  That being said, short term numbers around earnings, employment, and other economic markers will be dizzying, yet should be taken with a grain of salt.

Many of you who are able have taken advantage of these lower levels and added to your stock allocations over the past few weeks.  We are, though, by no means out of the woods, and it is impossible to predict market bottoms.  Earnings releases for the first quarter started this week, and the range of estimates vary wildly.  Governments across the globe have sent crystal clear messages that they will step in and provide whatever support is needed, and the Central Banks are in solid positions to fulfill that.  Their policy response in providing liquidity while simultaneously back-stopping the credit markets has been key, and will ultimately preserve the financial health of individuals, small businesses, municipalities, and corporations.  The monetary and fiscal programs are very complex, but banking systems are structurally sound and married with thoughtful public health responses, will lead us through this more quickly than many anticipate.

As I have said, I will be watching earnings very closely and assessing how the shutdowns will affect results.  The supply/demand impact will vary industry by industry, and I believe valuations will be influenced more significantly by sentiment than by earnings projections.  There is a decent amount of health to the recent rally and despite near-term challenges, high-quality U.S. stocks of companies with strong balance sheets will remain, in my opinion, the single best place for investment dollars.  With the yield on the 10-year U.S. Treasury hovering at just 0.6%, equity investments remain the optimal vehicle in which to grow wealth.  Now is the time to maintain a coordinated, disciplined, and patient approach to investing.  Please continue to reach out with your questions and concerns – we are working very hard to keep communication flowing with everyone.  And most importantly, please stay safe and healthy, and thank you for your continued trust and confidence.