- There was a huge reversal in the markets last Monday after we put together the Monday Minute. The market rallied nearly 800 points on the news that the Federal Reserve will not only buy Treasuries, MBS, and high yield ETFs, but individual corporate bonds. This news gave investors added confidence in the over-valued market we find ourselves in. The program has the ability to purchase up to $750 billion worth of corporate credit. https://www.cnbc.com/2020/06/15/the-fed-says-it-is-going-to-start-buying-individual-corporate-bonds.html?utm_source=morning_brew
- The equity markets finished the week up 1.8% on the SP 500 and continued its strength into today on Fed support and positive economic data – strong housing, active retail sales, and positive consumer spending. Last month’s jobs report was possibly the start of the new trend higher along with pent-up demand to restart the economy. The spread of COVID-19 as we reopen will obviously have a significant impact on the sustainability of the recovery. As mentioned last week, hospitalizations will be the key data point as testing becomes more widely available. We continue to look for opportunities to trim the winners in our portfolios to reset asset allocations back to our strategic targets. While we are still positive on the markets, they tend to over-shoot in both directions and we need earnings to catch up with valuations as equity prices are a little ahead of themselves. https://www.cnbc.com/2020/06/21/stock-market-futures-open-to-close-news.html
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