Randys Weekly Recap – Written April 30th 2020
Another Good Week for the Markets
The markets continue to respond favorably to the idea that the United States economy and economies around the globe will begin to reopen. Investors also are heartened by the earnings reports released this week. Many of the large capitalization companies generated results which exceeded expectations. Both Apple and Amazon report earnings tonight(4/30), after the market close. Looking at the chart of the NASDAQ market (below) would lead the average observer to conclude we are having a V shaped recovery. While the chart is helpful it doesn’t tell the full story in my opinion.
Another important market back stop came this week in the form of positive news on Gilead’s drug Remdesivar. Gilead released data on a clinical study which indicated that the drug does show promise in helping some patients reduce the length of their hospital. The drug also showed a good safety profile. Most importantly, this research helps investors psychology knowing that a therapeutic exists that can be used to treat potentially another wave of the coronavirus infections this Fall.
Full disclosure HighTower Bellevue does own Gilead Sciences stock in some client accounts.
The pace of the market recovery has surprised many investors on Wall Street. It also likely means the sell-off in stocks isn’t over yet, so I would not get to comfy if you are playing along at home. Longer-term, I think stocks will be higher, especially if you consider all the stimulus that has been levied at the market. The Federal Reserve has shored up the fixed income markets and pushed interest rates to zero which makes stocks attractive relative to bonds.
Enjoy your weekend and I am glad the restrictions regarding sheltering in place are starting to be lifted, before people really start to go stir crazy.
I plan to produce these Market Moment notes from my office in my basement every week on Friday.
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Stay safe and keep your family close during these difficult economic times.
More next week.
Partner Hightower Bellevue Advisors
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