Market Update March 20, 2020 – Staying the Course

Published by Waycross Partners on

Market Update March 20, 2020 – Staying the Course

Market Rout Deepens as Pandemic Widens

Following last week’s entry into bear-market territory, the longest bull market in history, which began in March 2009, is officially dead. Wall Street is now in a bear market. Most all central banks took action alongside the U.S. Federal Reserve who cut rates a surprising 100 basis points, along with an expanded quantitative easing program. However, these efforts seemed to fail at calming investor nerves with stocks continuing their plunge. Wednesday saw the exchange-mandated circuit breaker halt trading for the second time in three days after the S&P 500 fell 7% from its Tuesday close. After briefly rising on Thursday, market losses accelerated near the end of the day on Friday in response to a renewed fall in the price of oil and after New York and Illinois governors ordered all non-essential businesses in their states to close. The week ended as the worst since 2008.

Chart of the Week

Source: Bespoke Investment Group – Link

Sector to Watch: Technology

Currently, the enterprise IT sector is experiencing a seismic shift: companies are migrating their technology spending from on-premise hardware and software to the cloud.  With the emergence of coronavirus and employers’ resulting emphasis on working from home, this trend is likely to accelerate. We see opportunity in technology suppliers that are facilitating this transition. Examples include data centers that support cloud software and services and cloud-based software providers large companies use to manage their marketing and sales teams.  As a result, although coronavirus represents a drag on overall tech spending, there are market niches that at the margin stand to gain from it.

As market volatility rises, it can be very tempting to just react by selling positions and moving to cash. However, research has proven that investors who remain invested through a downturn are more likely to outperform investors that try to time the market. Even those investors that successfully time the market typically reap only marginal gains, while also increasing the risk of missing out on market upswings.

Disclaimer
Waycross Partners, LLC (“Waycross”) is an independent, privately owned investment management firm registered with its principle place of business in Louisville, Kentucky. Waycross three distinct investment strategies to our clients, which are made up of institutional and high net worth individuals. This material is for informational purposes only and is neither an offer nor solicitation to invest. Please read all offering memorandum, ADVs, and other risk disclosures before investing. Any projections, market outlooks or estimates in this document are forward looking statements and are based upon certain assumptions. Other events which were not taken into account may occur and may significantly affect the returns or performance . Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. The enclosed material is confidential and not to be reproduced or redistributed in whole or in part without the prior written consent of Waycross Partners. The information in this material is only current as of the date indicated, and may be superseded by subsequent market events or for other reasons. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Any statements of opinion constitute only Waycross Partners’ current opinions, which are subject to change and which Waycross Partners does not undertake to update.
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