Broker Check

COVID Captivity

March 30, 2020
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It has been and eventful week fraught with good news and bad.

The bad new first.

On the healthcare front: The total worldwide confirmed cases of COVID-19 are rapidly approaching 1 Million. As of today, there are over 777,000 confirmed cases worldwide with more than 37,000 deaths. In the U.S. there are 160,000 cases, more than any other single country on earth[1], and almost 2500 have thus far died of the disease[2].

On the economic front: Unemployment application in the U.S. surged last week as companies scrambled to preserve cash and drastically attempt to reduce expenses by reducing labor costs. Some industries, like the airline, lodging, sports, theater, and cruise industries have come to a virtual stop. Real estate companies are afraid that their tenants will not pay their upcoming rents, while lenders are uncertain of the degree to which mortgage and other debt payments will be forthcoming.

On the market front: Investors’ uncertainty has taken us on a wild ride.

Now for some good news.

On the healthcare front: The number of recoveries from COVID-19 (including those that needed the support of a ventilator) is much higher, and is growing at a much more rapid pace, than the number of deaths[3]. The remarkable innovation of our scientific, medical and industrial community is being unleashed with enormous swiftness previously unimagined. The FDA recently granted authorization for a COVID-19 test that delivers positive results in five minutes, whereas just weeks ago the turnaround time was several days[4][5]. While clinical trials to approve medicines for diseases normally take years, promising medicines are available now under medical protocols for physicians to use to treat this very new disease[6][7][8].

On the economic front: The Federal Reserve Bank, as well as Federal and State governments have unleashed their might to mitigate the economic consequences of the pandemic to families and businesses. They appear to be committed to keeping as many people and entities solvent and ready for a rapid recovery when the pandemic abates, which it inevitably will though the timing is uncertain[9][10].

On the market front: After the sharp drawdowns in recent weeks, markets rebounded steeply last week with Global markets (MSCI All Country World Index), as well as the U.S. markets (S&P 500® Index), surging approximately 11% on the week[11].

This world-wide pandemic continues to accelerate worldwide, even as it abates in some areas that were afflicted first. We are still in the acceleration phase in the U.S. and need to do all we can to lessen our chances, and the chances of those around us to be afflicted.

So, stay healthy, stay clean, stay solvent and embrace your circle of support ever tighter (while maintaining physical distance). In other words; hang tight - it’s going to continue to be a rough ride for a while.

As always, allow me to be in your tight-knit circle of support, and know that I am present and available to you and your loved ones, especially in these difficult times.

"To buy when others are despondently selling … requires the greatest fortitude and pays the greatest reward."
Sir John Templeton

The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.


[1]https://coronavirus.jhu.edu/map.html

[2]https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html

[3]https://coronavirus.jhu.edu/map.html

[4]https://www.medicaldevice-network.com/news/abbott-new-covid-19-test/

[5]https://www.abbott.com/corpnewsroom/product-and-innovation/detect-covid-19-in-as-little-as-5-minutes.html

[6]https://www.cdc.gov/coronavirus/2019-ncov/hcp/therapeutic-options.html

[7]https://www.medicalnewstoday.com/articles/who-launch-trial-testing-4-potential-covid-19-treatments

[8]https://www.nih.gov/news-events/news-releases/nih-clinical-trial-remdesivir-treat-covid-19-begins

[9]https://www.usa.gov/coronavirus

[10>https://www.eisneramper.com/governmental-private-covid-19-programs-0320/

[11>https://russellinvestments.com/us/insights/market-week-in-review


Best,

Daniel

Daniel Ruben, MD, MPH, MBA