Coronavirus Update
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Fed Intervention
History of Fed Intervention
Different from SARS
https://www.nytimes.com/interactive/2020/world/asia/china-coronavirus-contain.html
Infection / Fatality Rates
https://www.nytimes.com/interactive/2020/world/asia/china-coronavirus-contain.html
China Then
China Now
What that Growth Looks Like
International Travel has Doubled
Source: United Nations World Tourism
Global Growth Already Declining
Manufacturing Leader
Chinese Corporate Decisions
Global Supply Chain Disruption
https://www.apple.com/supplier-responsibility/pdf/Apple-Supplier-List.pdf
Macro Impact
COVID – 19 Growth Rate Outside China
Biggest Concerns
Global trade and economy slowing down prior to outbreak
Most global companies aren’t even aware of risk exposure –so many suppliers
Virus is worse than expected
Catalyst to drive us into a recession
Lack of ammo for Federal Reserve to slow down a recession
Currently Strength in the Economy
Source: Wall Street Journal
New Cases Slowing in China
U.S. Isn’t as Exposed to Tourist Dollars
Shorter-Term Impact
Markets are Resilent
Source: Strategas
Reasons for Optimism
Active cases beginning to slow
Virus is less severe
This type of volatility is short-lived
Economic impact “baked into the cake”
Stocks more fairly valued
People start going about normal routines
*Virus could be seasonal like the everyday flu and tapers off quickly this spring
What We Know
Global supply chains have been altered
OECD is predicting .5% global GDP slowdown thus far
Governments, companies, markets and consumers all spooked / confused
Federal Reserve rate cut can’t prevent pandemic spread
What We DON’T Know
Enough information about the virus itself to make an educated guesses
How long will this last?
How many people will be infected?
Companies don’t know how far supply chain is impacted
Economic impact is impossible to predict at this point
What to Do Now
Comfortable holding overweight to fixed income vs. stocks
- Downside risks are still significant
- Slightly tactical move
Be positioned to not overreact
- Reason we hold two years of cash
- For some, put cash to work
- Have a financial plan
- Refinancing options
Long-term investing always beats day trading
- Timing this market is luck
- This is being a “long-term investor”
Keeping Things in Perspective
Disclosure
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Bouchey Financial Group, Ltd.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Bouchey Financial Group, Ltd.. Please remember to contact Bouchey Financial Group, Ltd., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Bouchey Financial Group, Ltd. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the Bouchey Financial Group, Ltd.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.
Q & A
Follow-up Questions please contact us at:Office Phone: 518-720-3333
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