February 1, 2020
The world continues to experience the impact of the coronavirus on a variety of industries and the expected pullback from record levels was seen during the last trading week of February.
With China being one of the US’s largest trading partners, the slowing of exports and the disruption to supply chains that provide materials and services will amount to a slowdown in several areas. The result will be a temporary supply disruption and a slowdown in global economic growth. The coronavirus recovery percentage stands at 98%, particularly in developed countries.
As we experienced with the MERS, SARS and Ebola events, we expect this too will be controlled and shall pass.
On the political front, the results of Super Tuesday should give a clearer indication of where the general Democratic platform stands.
Currently, despite coronavirus, the flu and political jousting, the economy is still doing well with high employment, strong wage growth and low interest rates.
In the meantime, our disciplined practice of maintaining quality holdings and rebalancing quarterly has kept risk levels in line with your risk tolerances. We understand that although periods like these are not the most pleasant to go through, we also know our clients have experienced these events of consolidation many times in the past and will continue to strive for long term growth of their financial assets. As always, if you have any extraordinary cash needs coming up over the next 6-12 months, please keep us informed.
The Dow, S&P 500 and NASDAQ are all negative for the year at -10.96%, -8.56% and -4.52%, respectively. The 10-year Treasury is currently yielding 1.12 percent.
*Disclaimer: This report is a publication of Marchand Faries Financial Management, Inc. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgement of the author as of the date of publication and are subject to change.