From minus temperatures two weeks ago to a mid-30s humidex today summer has hit Toronto in the usual way, with little to no spring time. Equally hot is the stock market as on the 124th anniversary of the Dow Jones Industrial Average, the S&P 500 opened above 3,000 for the first time since March 5th, marking a 37% recovery (intra-day, 32.1% based on closing price) of the 35% decline that began on February 24th, call it three months ago. With the benefit of hindsight, the catalysts for this powerful advance are obvious. Continuing steady progress has been made at shrinking the growth rate of COVID-19 case counts in markets spanning from Germany to the U.S. (see graph on below left) and here at home in Canada. Meanwhile, large 2nd world markets such as India and Brazil (see graph on below right) seem to be two months behind North America as case counts are just in the midst of spiking. To maintain the positive momentum we’re seeing in North America, one item needs to be addressed plus members of society must adhere to one rule. First, authorities must further ramp up the capacity to test people. Second, despite summer being here, citizens must fight the urge to break free from social distancing. It goes without saying that setbacks would not be welcome by risk assets, especially given that the already humungous level of fiscal accommodation and monetary stimulus that has been utilized leaves question as to how much more could be done in the event of a major set-back.
Alternative asset manager offering investment solutions that find a balance between asset protection and capital enhancement.
Alternative asset manager offering investment solutions that find a balance between asset protection and capital enhancement.