Market Notebook


Global equities and the bond complex largely consolidated on the week.

Market participants appear to be shifting focus to future earnings as no new government interventions are pending. The reality of where earning go from here is complicated. Initially, there was hope that economic activity could move quickly back towards a pre-COVID-19 normal. Unfortunately, states’ efforts to reopen their economies are necessarily moving slower than hoped and recovery in the real economy has yet to begin. The response to COVID-19 is changing the earnings landscape along with consumer and investor psychology and the resulting changes are creating groups of winners and losers. Expect this process to continue for some time.

Barring positive news flow on the fight against COVID-19, and as market participants shift focus to company earnings, an air of pessimism could easily take hold. Equities have suffered mightily but have recovered quickly on government intervention. It seems natural for recent buyers to go through a period of “buyer’s remorse” whether justified or not. Be on the lookout for shifting sentiment.

Best Wishes!


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