Monthly Archive: March 2020

U.S. stocks rallied as investors saw glimmers of optimism in efforts to deliver rapid testing for the new coronavirus. The dollar rose.

The S&P 500 Index climbed for the fourth time in five days, rising 17 per cent over the last week, with health-care shares among the biggest gainers. The Nasdaq 100 advanced nearly 4 per cent, leading the rebound among benchmarks from Friday’s losses. Abbott Laboratories surged after unveiling a five-minute COVID-19 test and Johnson & Johnson announced a vaccine candidate for the virus.

The S&P/TSX composite index rose 350.76 points, or 2.76 per cent, to 13,038.50.

Crude fell more than 5 per cent even after Trump spoke with Russia’s Vladimir Putin about falling oil prices. The 10-year Treasury yield rose, while the dollar was on course to snap a four-session losing streak. Gold dipped.

Investors are grappling with the reality that the world’s biggest economy will stay crippled

In bear markets, we’re overwhelmed by what we don’t know. Everything gets turned on its head. Long-held assumptions go out the window. And we’re left with a whole new set of questions.

Bob Hager, my former partner at PH&N, said, “With every bear market, there are always unknowable concerns, and every time we’re told that this bear market is different.”

In the current crisis, we’re working on two big questions that weren’t even on the radar a month ago. Namely, how long will the economic disruption go on, and what will the new normal look like after the recovery.

As we wrestle with these and other unknowables, it’s useful to lay out what we do know. As investors, we have new information and some time-tested truths to work with.

What we know this time

Markets have adjusted swiftly to the new reality. In fact, the speed of the drop was