by Connor Darrell CFA, Assistant Vice President – Head of Investments
U.S. equities (as measured by the S&P 500) continued their bounce from last month’s lows last week with investors seemingly more focused on the spread of COVID-19 than on economic fundamentals (which continue to deteriorate). Further fueling investor optimism was a growing sense that Congress would move toward passing “Phase 3.5” of economic stimulus. In fact, reports emerged Monday morning that the general belief in Washington is that something will be passed by the end of this week. The ideas being proposed include an expansion of the Paycheck Protection Program (PPP), an additional $60 billion allocated to the SBA disaster relief fund, and additional federal funding for hospitals and COVID-19 testing kits.

Q1 earnings season also kicked off last week, with several of the nation’s largest banks providing investors with the first sense of how corporate leaders are assessing the current environment. During investor calls, JPMorgan, Bank of America, and Wells Fargo all provided a rather bleak near-term outlook and cited historically high levels of uncertainty. The extreme uncertainty across markets is also succinctly represented in current S&P return forecasts, where the difference between the most bullish and most bearish wall street estimates stands at its widest level in history. We continue to remind investors that in such an uncertain environment, the importance of discipline and maintaining a focus on long-term objectives cannot be overemphasized. In the near-term, there are a variety of factors that can move markets in either direction, but in the long-term, we can say with a very high degree of confidence that markets will achieve new highs once again.