Commentary
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Reasons for Cautious Optimism
So far, the spectacular recovery of the equity market from the panic low in late March has been overwhelmingly powered by a narrow group of high-profile technology names.
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Markets March Forward to the Surprise of Many
Despite the unlikelihood of a return to anywhere near normal economic activity anytime soon, the ongoing advance of risk assets continues to defy conventional wisdom.
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Virus Concerns Continue to Fuel Investor Caution
The elevated economic uncertainty that has persisted since the onset of the Covid 19 pandemic has yet to abate. Several regions of the country are now seeing a resurgence in infections, apparently in response to a slowly opening economy (although increased testing may also be a factor).
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Weight of Evidence – A Bullish Turn
In last month’s commentary we expressed concern about the lagging price action of high-yield bonds relative to equities, especially the leading Nasdaq stocks.
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Despite a Rebounding Market, Caution is Warranted
The stock market as represented by the major indices has regained 50% or more of the precipitous drop that unfolded from mid-February into late March.
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Investors Tread Uncharted Waters
Investors have been subjected to unprecedented volatility since the stock market peak in mid-February. Not just equities, but even short-term investment grade corporate and municipal fixed income securities have exhibited wild swings in price.
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Markets Take a “Black Swan” Dive
To say the current market environment is challenging is an understatement. The sudden and vicious nature of the decline since the S&P 500 peaked at an all-time high of 3,386.15 on February 19 has been historically unprecedented in some ways.
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Market Climbs a Wall of Worry Despite One Crisis after Another
Few investors have had the intestinal fortitude to remain resolutely invested throughout the numerous crises (and associated temporary market dips) that have marked the long-term bull market that began in 2009. This time it’s the threat of a coronavirus pandemic emanating from China which has quickly spread across the globe.
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High-Yield Bonds End the Year on a Strong Note
2019 marked the 28th year of performance history for Kensington’s flagship Managed Income Strategy. To the surprise of most observers, high-yield bonds turned in a very respectable performance for the year.
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The Bull Market Continues to Break Records
The bear market that ended in March of 2009 was one of the worst in history. Now, over 10 years later, it’s being followed by the longest bull market in history. To put it another way, it’s the longest stretch without a 20% correction since 1900, as illustrated by the chart below.
