Equity markets around the world continue to weaken on concerns around its potential impact to the global economy. The S&P 500 has fallen for four-straight trading sessions and is now down more than 3% this year and more than 7% from its February 19 all-time high. Moreover, stocks fell by more than 3% in back-to-back sessions for the first time since August 2015. While we could not have predicted such an event, we have been cautious towards equities given their lofty valuations coming into 2020. With so many uncertainties surrounding the spread of this virus, we believe more equity market weakness is possible. However, this downside could be limited as global central banks are able to extend their ultra-easy monetary policies and the U.S. economy and consumer remain in good shape. We don’t recommend betting on one single outcome and warn about being too optimistic or too pessimistic. Regardless of investor reaction, we continue to expect market volatility to remain elevated.
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Commentaries are published by Cetera Investment Management LLC, an SEC registered adviser owned by Cetera Financial Group. Cetera Investment Management provides market perspectives, portfolio guidance, model management, and other investment advice to its affiliated broker-dealers, dually registered broker-dealers and registered investment advisers.
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