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Is The Market Back On Track?

By Matthew Stasiw.


Monday's Market Update

Following Monday’s gains, investors appear to already be looking past the coronavirus as the world is slowly turning back to normalcy. Overnight, views of the market were positively enhanced among reports of expanded testing capabilities. Along with this, the US growth rates for the virus are slowing, which is prompting many states across the country to begin the process of lifting containment policies. his optimism is being shown real-time in the market today as the S&P and the Dow are up. Investors have also appeared to start to invest in financials and small caps again, showing a change from a more defensive stock investment. As long as optimism and good news continue to circulate, so will the rally of the market. Great news!


Is SIMM Following This Trend?

SIMM, as a whole, has been seeing positive upside the past two weeks relating to recent optimism in the market. Even our iShares Russel 2000 ETF has seen positive growth as of recent, reflecting a market change. Now, considering optimism and the reopening of certain states’ economies continue to proceed as planned, our general portfolio has a strong chance of seeing positive growth over the month of May. Furthermore, considering at the end of May the positivity is still persisting, the Market would appear to be in a full rebound mode. What does this mean for SIMM you ask? Possibly a slight change in our strategy should be considered. As expected, the last two months of investing for SIMM have been quite defensive in nature. Considering the volatility of the market, this was the only way to ensure our portfolio remained relatively intact. Although this optimism seems slightly early to judge in full, I would like to see some more interesting pitches from the SIMM sectors. By interesting, I mean “riskier” assets when compared to the last two months. At the least, a discussion should be held by members of our team discussing the possibility of shifting views on the market. This discussion could lead to more inventive and less defensive ideas. This is, of course, not a promotion for SIMM to revoke its long-term investment outlook or to place our value into the hands of companies that make no sense. We are a team on SIMM, one that overlooks every idea and votes on it to give our portfolio the best chance. That being said, our class should be considering the idea of adding more pitches. This process should, as always, be taken with caution and reflect any volatility that could be found in the market.


Source:

  1. https://www.marketwatch.com/story/stock-index-futures-rise-with-coronavirus-lockdowns-set-to-ease-2020-04-27?mod=investing

Picture: https://www.moneycontrol.com/news/business/markets/financials-may-see-fy21-earnings-drop-40-bnp-paribas-gives-10-stock-picks-5167561.html

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(January 2020)

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