In today’s Steady Investor, we look at key factors that we believe are currently impacting the market and what could be next for the markets such as:
When is the Economy Going to Reopen? Perhaps the most important and contentious question in the United States and across the world today is, when is the right time to reopen the economy? Epidemiologists, economists, and politicians all likely have different answers to the same question. The answer to the question is a delicate dance between all three, and getting it wrong – whether that means opening too early or too late – can have serious consequences. Epidemiologists and economists may not differ as much in opinion as many might anticipate, however. Epidemiologists consider the public health risk of reopening too early, potentially resulting in another severe outbreak. Economists, similarly, might consider the cost of enduring another massive shutdown versus the short-term cost of waiting longer. As it stands today, states on the East Coast and West Coast have formed coalitions to study a gradual, rolling reopening, and there is an apparent tension between the federal government and states over who has the authority to make decisions. Regardless, Americans should reasonably expect that a return to work will not look like it once did. Social distancing requirements will likely remain, and there is likely to be increased monitoring of employees and customers, including temperature checks and blood tests to determine if a person is ready to return to work.1
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While We Wait for the Economy to Recover, What Can Investors Do?
Many investors are wondering what they should do in response to this crisis and how they should respond to protect their investments. At the end of the day, I think the key for investors is to try and focus on the hard data. Bear markets do not last forever, in fact, they are generally much shorter than bull markets.
I recommend that investors remain calm, focus on the long-term and not let your emotions take control of your investments. To help you do this, I am offering all readers our just-released April Market Strategy report. This report contains some of our key forecasts & factors to consider such as:
If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!
IT’S FREE. Download the Just-Released April 2020 Market Strategy Report2
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Economic Silver Lining: Big Tech is Still Hiring – As most sectors in the US and global economy come under intense pressure, technology companies are proving to be leaders in growth and progress, as they did throughout the 11-year economic expansion. Apple, Google, and Amazon are all looking for software engineers, data scientists, product designers, and other highly skilled workers. Facebook said this week that usage has soared during this crisis, and given they expect robust activity through the election, they are hiring more than 10,000 people this year for key roles in product and engineering teams. Amazon said that as of April 10, it has 20,000 open tech jobs! The list goes on, and is merely a reflection of a trend that has been going on for the better part of a decade – companies are moving operations into the cloud, e-commerce, and online. It follows that companies building, servicing, and growing the digital economy’s infrastructure are seeing steady demand. Meanwhile, demand for PCs increased in the first quarter given a surge of people working from home, but supply chain disruptions impeded the production needed to bring enough new computers to market.3
Major Cuts to Oil Production – In a landmark deal struck this week, Saudi Arabia, Russia, and the United States led a coalition to reduce global supply by 13%. The coalition of oil producers was able to make 23 countries agree to withhold a total of 9.7 million barrels of oil from the market per day,4which is designed to help reduce the current oil glut fueled by sinking global demand. Even with the cuts, however, the price of oil is not likely to see much support, in our view. According to the International Energy Agency, global oil demand is expected to fall by 9.3 million barrels a day this year, which would mean production cuts may only serve to keep prices consistent with the current supply and demand balance we see today. The US energy sector has been pummeled relative to other sectors in the economy, as production cuts may ultimately bankrupt many smaller players in the industry. Pipelines, refiners, and storage facilities are filling up across the US and Canada.
What Can Investors do to Protect Their Investments? – As we wait for the virus to pass and the economy to recover, many investors may be wondering what they can do now as we wait. In the meantime, I recommend that investors remain calm, focus on the long term and not let emotions take control of their investments. To help you focus on the fundamentals instead of the fearsome headlines, I am offering all readers our Just-Released April 2020 Market Strategy Report.5
This Special Report contains new forecasts and insights that can help you base your next investment move on hard data. For example, you’ll discover Zacks’ view on:
If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!
Disclosure