(New York)

One of the hardest things to do in a crisis is to sit back and let one’s mind relax enough to think creatively and see the big picture. This has been particularly hard to do in the fog of the coronavirus, which is not just a financial/economic crisis, but primarily a health emergency that has disrupted our everyday lives more than in any period since WWII. So what are some of the long-term economic, and thus market, consequences of this virus? We believe the main outcome of this huge lockdown is ultimately going to be more consolidation of power by large corporates. As Main Streets across the US are cleared out of small business that do not have the capital to survive, American consumers will be ever more incentivized to look online and to existing behemoths (who have the resources to weather this storm). As a very short-term example, think of the 100,000+ workers will will quickly migrate from Main Street retail/service sector jobs into employment for Amazon; the consolidation that is happening in employment will front-run consumer spending.

FINSUM: As sad as it may seem, we see this lockdown as a big tailwind for the S&P 500 over the next few years, as this is the kind of crisis that will wipeout small competition and concentrate revenue in an ever smaller group.

(New York)

Markets have been on an extraordinary run over the last three days. 20%+ for the Dow and a measly 18% for the S&P 500, technically ending the bull market. It was the best three-day run since 1931 (in itself a bleak reference). However, many on the street think this rally was too bullish too fast, as we are arguably not even to the worst of the health crisis, and certainly not in the worst part of the coming economic slowdown.

FINSUM: We are going to have at least two quarters of awful earnings and several months of terrible jobs data, so there is a long way to go. This seems like a stimulus-euphoria/dead-cat bounce rally.

(New York)

Advisors who might be thinking of moving—now may be the time. Big crises are often a catalyst for advisors changing firms. The reasons why are numerous. Some advisors grow unhappy with the support their current firm gives them during a hard period like this one. Others see a big drop in revenue and need the bonus check of signing with a new firm in order to keep their team intact. Others try to sell soon after a crisis hits because their valuation (based on AUM/production) will likely not be higher for years.

FINSUM: Generally speaking, one would think that there would be a lot of moves in the next several months. However, one issue right now is that advisors cannot have face-to-face meetings with their clients to take their temperature on a move. All that said, if you are considering a move, many firms are ready to cut checks.

(New York)

Anyone paying any attention to the economy or markets knows dividends are in trouble. With the economy set to shrink 30% in Q2 and a likely big negative growth number for the year, companies are going to have a very hard time maintaining profitability and dividend levels. With that said, here are some stocks that should have safe dividends. Texas Instruments and CVS both look attractive, yielding 3.6% currently, as does Intel (which yields 2.5%).

FINSUM: The brightest news for investors is that many companies have announced a suspension of buybacks but have plans to maintain their dividend, so there should still be some decent income.

(New York)

Today is a stark reminder of the differences between the view from Main Street and the view from Wall Street. US weekly jobless claims were leased this morning and broke the all-time record of weekly losses by almost 500%. The previous record was 695,000 jobs lost in 1982. This week’s figures was 3.28m. Yet despite the shockingly grim number, stocks are rallying heartily as investors bet the government’s stimulus will be a cure-all.

FINSUM: This is a great example of how the market only cares about actual vs predicted numbers. Investors figure the 3.3m losses were already priced in, so presumably there is upside. The reality of where things head is anyone’s guess.