It’s said that you shouldn’t look a gift horse in the mouth, but we’d argue that it doesn’t hurt to check it for cavities occasionally. The stock market has certainly played the role of gift horse lately, returning over 4% so far this year and an average of 14% since early October, including reaching new all-time high last Wednesday. We have no objections to this latest rally. The economic backdrop, monetary policy settings, and financial conditions are all supportive of further longevity for this bull market.
Coronavirus concerns have sparked a few bouts of daily market volatility, but U.S. equities have largely taken the developing outbreak in stride, rising 4.4% so far, this year. Travel bans, shuttered factories and businesses in China, along with the rising number of confirmed cases around the world, naturally evoke an emotional response as well as questions around the potential implications for the investment outlook
Markets have been adept in shaking off risks so far in 2020. After two consecutive weeks of losses, major indexes posted their best week since June of 2019.
Week 05 of 2020, Lesson from SARS: Long-term market conditions outweigh short-term uncertainty