EZ Bites -- Week ending March 6, 2020

FOR THE WEEK:

DOW: +1.8%. (YTD -9.45%)
?S&P: +0.6% (-8.0%)
NASDAQ: +0.1% (-4.4%)

RECAP: The headline that dominated the week was the coronavirus outbreak and fears of its effects on the domestic and global economy.  Because of that, the markets experienced unprecedented daily volatility, as the growing focus on new cases in the U.S. and abroad weighed on the market's expectations for growth.  

To counter the economic fallout, the Federal Reserve announced an emergency 50 basis point rate cut on Tuesday.  After an initial bounce, markets continued their slide as  investors were looking for further stimulus or concrete indications of such.  Treasuries charged higher throughout the week, representing a flight to quality, sending the 10-yr yield lower by 42 basis points to 0.71%.  This yield is the lowest yield ever recorded for the 10-year.

Congress approved $8.50 bln in emergency spending measures while administration officials hinted at future targeted stimulus.

SECTORS: Leaders for the week: Utilities (+7.9%), Consumer Staples (+6.2%), Health Care (+5.0%), Real Estate (+4.8%). Laggards: Energy (-7.3%) and Financials (-4.1%)

• Health care climbed after Joe Biden won the bulk of primaries on Super Tuesday, seizing the Democratic delegate count lead from Bernie Sanders, reducing the probability of a major party candidate triumphing medicare-for-all which has as a component the end of private insurance.
• The energy sector fell as crude oil slid to its lowest level since mid-2016 to $41.00/bbl – this resulted mainly from expected reductions in demand for transportation and economic output due to the coronavirus.

EZTracker Message: When the markets start to swing up & down wildly, as we saw over the past 2 weeks, it is natural to worry. The truth is no one really knows when things will return to normal—it’s impossible to time the market. Let us reiterate that --  it is impossible to perfectly time the peaks and valleys of the market. From a long-term investor point of view, history shows that a diversified financial strategy is still the best way to achieve your long-term financial goals. Tune out the talking head noise on cable channels, and return to your own long-term goals. 

Some helpful links:

https://www.morningstar.com/articles/970515/the-markets-crazy-get-excited

https://www.cnn.com/2020/03/06/investing/401k-stocks-coronavirus/index.html

Our April EZTracker Newsletters come out Sunday March 29th.