Market Commentary May 1st, 2020

May 1st,  2020

By now, every person is ready to escape from their homes and start to return to normal. The Governor of North Carolina, Roy Cooper is going to let the state at home order expire on May 8th at 5:00 PM and some businesses will begin the process of re-opening.  

Over the last 30 days, we have seen major news with the FDA granting emergency usage for hospitals to use Gilead’s drug Remdesivir.

I believe another drug company, Moderna’s drug will get the green light to enter the Food and Drug Administration’s phase 2 trial and possibly a phase 3 by the end of summer if testing continues to perform well

In the last 40 days, we have seen the market swing from the lows of 18,000 on the Dow Jones to 24,000.

The stocks that participated in the rally should continue to be the leaders of the market. In my recommendation, technology and communication sector stocks should be part of any portfolio.

I will continue to be a firm believer in the stock market until I see metrics that point in a different direction.

When I wrote the last morning note back on April 8th, we were looking at some investments up 90% off their lows.

Even with a pullback, we continue to see the same companies doing well and bucking the downward trend over the last two days.

Investors should be leery of chasing dividends. This has been a safe haven for investors in the past but the damaging impact of the virus has hit companies harder than they have seen in decades.

There have been a number of companies that have surprised investors by either cutting or eliminating their dividends completely.

The S&P 500 is only down about 12% YTD and the Nasdaq is only down about 4%. A number of other sectors are down but technology is only down about a negative 3% YTD compared to the big drop in the oil sector of negative 67%

Investors should continue to monitor their investments. If you are unhappy with your portfolio, review it, and make changes.

Be proactive, clean out investments that aren’t in line with your investment goals, and understand what you own.

If they are beyond your expertise, give us a call.

We do provide free consultations. We do not charge commissions in our firm, so don’t worry about being sold something. To quote one caller, “What are you going to try and sell me today”.

I believe a year from today, the market will be higher and there will be a number of investments that will turn themselves around and others that won’t.

Stay safe, stay focused, and stay disciplined….

Disclaimer:

These are the views of Aurora Strategic Advisors, LLC (ASA), and should not be construed as investment advice.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.

Neither ASA nor the Investment Advisor gives tax or legal advice.

Please consult your financial advisor for further information.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.