DAILY INSIGHTS

Another big week. Stocks opened higher on the heels of huge gains last week. President Trump extended the CDC’s social distancing guidelines through April, as there has been success with containment strategies in Seattle, and China saw no new cases in Wuhan for a sixth straight day. Last, there is already discussion about Congress working on a fourth stimulus package, and Japan is pushing for a $500 billion plus stimulus package.

Big bounce last week. Stocks finally bounced last week, as the Dow had its best week since the Great Depression, and the S&P 500 Index had its best week since March 2009. The bounce was sparked by a combination of historically oversold conditions, a potential peak in new cases in Italy, and Congress passing a nearly $2 trillion fiscal stimulus plan to immediately help those impacted most by the COVID-19 pandemic.

Upgrading equities. In this week’s Weekly Market Commentary, we discuss why we have upgraded our view on equities to overweight from market weight, where it has been since March 2019. As we’ve discussed in our Road to Recovery Playbook, we now have visibility into how bad this recession will be, and the policy response has been sufficient to restore confidence. Although we still haven’t seen a peak in the number of new COVID-19 cases in the United States, we expect that to come within the next two weeks.

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