Stocks Bounce Even as Economic Uncertainty Remains

The COVID-19 pandemic is having a profound effect on our lives. We are all paying close attention for worldwide efforts to curtail the spread of the virus and for discussions about reopening the economy. Through it all, we hope you and those close to you are finding ways to safeguard not only your physical health, but also your mental and emotional well-being.

With so much happening – including the bounce we saw in the stock market over the past week – I believe it’s important to share with our valued clients the latest information from Raymond James:

“While this positive bounce is a reflection of the market pricing in positive news over recent days (e.g. potential peak in New York cases, increase in fiscal stimulus), we are not yet out of the woods with respect to the virus, given that we do not yet have a vaccine or therapeutic.” Chief Investment Officer Larry Adam notes.
“The near-term economic outlook has begun to coalesce around a sharp downturn in gross domestic product in the second quarter of 2020 – possibly at around a -30% annual rate, maybe more,” Raymond James Chief Economist Scott Brown said. “The economy will recover, but a rapid bounce-back appears unlikely.”
On top of the $2 trillion fiscal stimulus package the U.S. federal government passed recently, Raymond James Washington Policy Analyst Ed Mills expects additional support for small businesses.
The U.S. Federal Reserve sold $25 billion in 10-year Treasury notes on Tuesday, injecting valuable liquidity into the market, according to Raymond James Chief Fixed Income Strategist Kevin Giddis.
Raymond James healthcare policy analyst Chris Meekins believes the U.S. has made progress in understanding the severity of the virus, but little progress in testing capacity, contract tracing and vaccine solutions. “We reiterate that reopening our country will require either increasing public comfort with the virus – generally accepting its devastating effects or making testing and treatments readily available – or stopping the spread, which could drag present conditions out until we turn a corner on Memorial Day at earliest or after Labor Day at latest,” Meekins said.
Until we get more clarity, the financial markets likely will continue to experience volatility. “We would use pullbacks as opportunities for long term investors to continue accumulating during the current bear market,” says Joey Madere, senior portfolio strategist for the Raymond James Equity Portfolio & Technical Strategy group.

You likely know someone whose livelihood or education has been impacted by the COVID-19 response. Here’s a brief glimpse at some assistance available through the Coronavirus Aid, Relief and Economic Security, or CARES Act. The CARES Act is intended to combat the economic risks associated with a slowdown in individual spending and help businesses of all sizes avoid closures and employee layoffs. It also provides necessary funds to help support states and municipalities. Check out our latest digital resources:

As we all gain our bearings, I'll continue to keep you updated with relevant, and hopefully, useful information. You can find the latest on the coronavirus and market volatility here.

Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of Raymond James and are subject to change. There is no assurance that any of the forecasts mentioned will occur. Economic and market conditions are subject to change. Past performance may not be indicative of future results. The performance noted does not include fees or charges, which would reduce an investor's returns. Material prepared by Raymond James for use by its advisors.

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Stocks Bounce Even as Economic Uncertainty Remains

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