Week 29 - $392.56
The S&P 500 index reported its best month since 1987 in the midst of a global economic shutdown, with businesses slowly beginning to reopen across various states.
Total Report (Since October 11th, 2019)
Positive Performing Sectors
1. Healthcare (+2.52%)
Negative Performing Sectors
2. Consumer Staples (-5.43%)
3. Materials (-14.89%)
4. Information Technology (-15.87%)
5. Utilities (-16.82%)
6. Consumer Discretionary (-17.67%)
7. Industrials (-19.12%)
8. Communication Services (-21.60%)
9. Energy (-26.74%)
10. Financials (-27.83%)
11. Real Estate (-36.80%)
1. Healthcare (+2.52%)
Negative Performing Sectors
2. Consumer Staples (-5.43%)
3. Materials (-14.89%)
4. Information Technology (-15.87%)
5. Utilities (-16.82%)
6. Consumer Discretionary (-17.67%)
7. Industrials (-19.12%)
8. Communication Services (-21.60%)
9. Energy (-26.74%)
10. Financials (-27.83%)
11. Real Estate (-36.80%)
Weekly Report (May 1st, 2020)
Positive Performing Sectors
1. Real Estate (+5.75%)
2. Consumer Discretionary (+3.41%)
3. Materials (+1.30%)
4. Industrials (+1.29%)
5. Information Technology (+0.85%)
6. Energy (+0.66%)
7. Communication Services (+0.61%)
8. Financials (+0.03%)
Negative Performing Sectors
9. Consumer Staples (-1.84%)
10. Healthcare (-4.24%)
11. Utilities (-5.38%)
1. Real Estate (+5.75%)
2. Consumer Discretionary (+3.41%)
3. Materials (+1.30%)
4. Industrials (+1.29%)
5. Information Technology (+0.85%)
6. Energy (+0.66%)
7. Communication Services (+0.61%)
8. Financials (+0.03%)
Negative Performing Sectors
9. Consumer Staples (-1.84%)
10. Healthcare (-4.24%)
11. Utilities (-5.38%)
GICS Sector Performance Ratio - Balanced: From 1:10 (9.09%) to 8:3 (72.73%)
Review
Stocks rebounded this week as states across the United States have begun to reopen despite no clear signs of the COVID-19 pandemic declining. Promises of new treatment to combat COVID-19 and the diminishing number of new cases has prompted confidence in the market to begin acquiring new stakes in preparation for a post-COVID-19 economy. Yet even as the economy is beginning to open, there are already troubling signs of a prolonged recession. High unemployment, an impending second wave of the pandemic, deteriorating credit and GDP, and supply shortages are wreaking havoc on the economic health of the nation.
In fact, Warren Buffet's Berkshire Hathaway recently sold all of its positions in airline stocks because of the impact that COVID-19 has had on the airline industry's future. Berkshire Hathaway has a history of buying and holding stocks indefinitely once it has determined a well-valued deal for acquiring a stake in its chosen company. For the company to cash out of all its airline holdings implies it had re-evaluated the industry's future potential and concluded it will not recover from the pandemic crisis for many years. Such conclusions are not limited to airlines. Nearly every sector has taken a significant hit as a result of the crisis and a substantial number of businesses are struggling to find enough cash to keep operations active.
Although the stock market may not directly emulate the state of the current economy, nevertheless it will always catch up to it in due time. It may take many months before the real price of stocks are realized, but reality must come by eventually. For the stock market to continue rising against the current economic situation is to invite a price bubble. There may be many more, deeper dips to come before the economic crisis is averted and the stock market returns to its normal gains.
In fact, Warren Buffet's Berkshire Hathaway recently sold all of its positions in airline stocks because of the impact that COVID-19 has had on the airline industry's future. Berkshire Hathaway has a history of buying and holding stocks indefinitely once it has determined a well-valued deal for acquiring a stake in its chosen company. For the company to cash out of all its airline holdings implies it had re-evaluated the industry's future potential and concluded it will not recover from the pandemic crisis for many years. Such conclusions are not limited to airlines. Nearly every sector has taken a significant hit as a result of the crisis and a substantial number of businesses are struggling to find enough cash to keep operations active.
Although the stock market may not directly emulate the state of the current economy, nevertheless it will always catch up to it in due time. It may take many months before the real price of stocks are realized, but reality must come by eventually. For the stock market to continue rising against the current economic situation is to invite a price bubble. There may be many more, deeper dips to come before the economic crisis is averted and the stock market returns to its normal gains.
Last Week's Update (April 24th, 2020)
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M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6
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