RESOURCES FOR VOLATILITY

Tools to share with your investors

Despite millions of job losses and an unprecedented drop in economic activity, April was the best month for the S&P 500 since 1987. This sharp market recovery in the face of economic weakness is top of mind.

In this report, we break down today’s payroll data, recent market performance and what investors need to prepare for next.

While it’s impossible to know what type of recovery lies ahead, investors may be wise to prepare for a long, slow and sometimes volatile path. This is particularly possible given the extraordinary range of potential drivers of volatility today – whether related to COVID-19 vaccines and treatments, equity valuations, geopolitical tensions or slow consumer demand.

Making sense of the challenges the economy will face as it reopens has critical implications for investors.

With the current economy in deep contraction and shelter-in-place orders set to continue – yet COVID-19 still a roaring health crisis – it’s hard to imagine a time in the near future where it will feel fully safe to reenter the world at large. Similarly, it’s hard to imagine watching the economy’s continued destruction without a plan in place.

Efforts to contain the spread of COVID-19 in the U.S. are resulting in shuttered businesses and an unprecedented dislocation of economic activity. Given the nature of the crisis, certain areas of the economy are likely to be hit hardest.

The recent wild swings in markets are testing investor portfolios for the first time in a long while. Many investors may find themselves less diversified than they had hoped as many asset classes have moved in virtual lockstep.

In this research note, we discuss why many traditional sources of portfolio diversification have failed – and highlight the choices we see for effective diversification going forward.

Policymakers are racing to try to blunt the coming economic shock related to COVID-19. Despite their best efforts, however, market volatility has been unrelenting in the face of unprecedented uncertainty. The Fed has rapidly cut rates to the zero lower bound and added liquidity in a variety of ways, and fiscal policymakers are framing out a stimulus package. And yet, on Monday, investors had to contend with another punishing sell-off.

We dig into the Fed’s latest move, what to watch as economic data reports start to reflect COVID-19-related activity, and why investors could have to contend with volatility for months to come.

The COVID-19 outbreak has become a full-fledged global pandemic. We’ve seen unprecedented moves in markets and fiscal and monetary policy response.

In this note, we take a look at the current corporate credit market impact, the effects of recent Federal Reserve policy response and the best course of action we see for investors moving forward.

The U.S. CRE market, just like every other corner of financial markets, will almost certainly be impacted by COVID-19. Ultimately, the severity of the impact will largely be determined by how quickly the virus can be contained in the U.S.

In this note we look at potential impacts of COVID-19 on the CRE market, how much stress properties are equipped to handle, and which property types are most exposed.

Crude oil prices have plummeted, with a demand shock from the COVID-19 outbreak and a supply shock caused by the breakdown in OPEC+ talks driving an unprecedented move. WTI has fallen 49% from its level to start the year, including a spectacular 28% drop on March 7, the largest one-day decline since the Gulf War.¹ While significant, economic and financial market exposure to the energy sector in the U.S. has fallen since the last oil downturn, helping to buffer potential impacts.

Alternative investments may help – and our recent survey shows both advisors and individuals are interested in increasing their allocations to alternatives but desire more education and better conversations.