COVID-19 Progress

April 2, 2020 | Insights on COVID-19, the Economy and Government Aid Packages

Recent government aid efforts are unprecedented in scope, and we expect continued legislation to address the economic impact of the global battle against the COVID-19 pandemic. As of today, here are the highlights.

POSITIVES:

1. Congress passed and the President signed the $2 Trillion aid package. This will urgently get cash into the hands of eligible businesses and households.

2. The Federal Reserve Banks’s emergency actions and backstop programs are now revealing their intended effect, which is to increase confidence and stability within the global banking system and to enhance the liquidity of financial markets as the Fed commenced purchasing hundreds of $ billions worth of bonds.

3. The S&P 500 Index rallied 17.6% between Monday March 23 and Monday March 30 (Factset Data).

NEGATIVES:

1. The stock market continues to experience high volatility as seen in VIX Index (Factset Data).

2. COVID -19 case numbers continue to expand.

3. Initial US Weekly Unemployment Claims leapt to 3.3 million. We expect this number to remain elevated in future reports.

4. Enormous uncertainty remains, as we witness the unfolding of a new prevailing economy.

WHAT’S NEXT?

1. Anticipate earnings detail and other Q1 financial data once companies begin reporting in early April.

2. Additional further financial aid for the US Economy is already being drafted in Congress.

3. Rapid testing is becoming more broadly available and increasing by the day. This builds confidence that officials will gain the ability to identify and call out when the virus will peak and later subside enough for business to resume.

Ashfield remains focused on our research-based investment approach and looking ahead to the future state of our economy. Please don’t hesitate to contact us with questions or concerns. In the meantime we’ll continue to follow health and safety guidelines and encourage you to do as well. We will weather this storm at your side.

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This communication has been prepared solely for informational purposes, based upon information generally available to the public from sources believed to be reliable, but no representation or warranty representation, express or implied, has been made as to the accuracy or completeness of the information contained herein and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or to participate in any trading strategy. If any offer of securities is made, it will be pursuant to a confidential offering memorandum, an investment management agreement or other offering materials, which contains material information not contained herein and which supersedes this information in its entirety. This communication is not designed to be a comprehensive analysis of any topic discussed herein, and should not be relied upon as the only source of information. Additionally, this communication is not intended to represent advice or a recommendation of any kind, as it does not consider the specific investment objectives, financial situation, applicable risk factors, and/or particular needs of any individual client or investor and should not be relied upon as the basis for investment decisions. Additional information is available upon request.

 

The investments discussed herein are for illustrative purposes only and it should not be assumed that such investments were or will be profitable or that the investments or recommendations Ashfield Capital Partners makes in the future will be profitable or will equal the anticipated results discussed herein. Past performance is not necessarily indicative of future results. The indices, markets and countries referenced in this communication are provided for informational purposes only and should not be used as the basis for making an investment decision. The indices, markets and countries referenced in this communication are included merely to show the general trend in the markets in the periods indicated and are not intended to imply that the underlying returns were comparable to the indices, markets or countries either in composition or element of risk. There are significant differences between client accounts and the indices, markets and countries herein including, but not limited to, risk profile, liquidity, volatility, and asset composition.

 

Index Disclaimers:

The benchmarks referenced are included to reflect the general trend of the markets during the periods indicated and are not intended to imply that the underlying returns were comparable to the market indices either in composition or element of risk. There are significant differences between client accounts and the indices herein including, but not limited to, risk profile, liquidity, volatility, and asset composition.

The S&P 500 Index is a capitalization-weighted index comprised of 500 stocks chosen for market size, liquidity and broad industry group representation within the U.S. economy.