Coronavirus has gripped headlines, toppling a decade-long bull market and fueling wider oscillation in equities. No doubt that stress is on the rise as you attempt to engage with clients. How can you best position client portfolios to adapt to the current market changes yet rise above the stress?
In the upcoming webcast, Unknown Waters: Insights to Help Manage Portfolios and Stress, Carl Tannenbaum, Executive Vice President/Chief Economist, Northern Trust; and Ari Levy, Founder and CEO, SHIFT, will focus on helping you understand today’s markets in light of recent Fed activity while offering strategies to help you manage client stress and your own personal wellbeing.
Tannenbaum argued that the current dour sentiments are driven by uncertainty.
“As long as new infections continue to be reported, fear will persist,” Tannenbaum said in a note. “Other countries’ experiences suggest news in the U.S. will get worse before it gets better. However, we are encouraged by the high worldwide survival rates of COVID-19 and by China’s return to production after its serious slowdown. Recession is not our base case, and we expect a return to trend growth in the second half of the year. But the situation is fluid, and downside risks are certainly present.”
The Northern Trust team pointed to supportive factors such as easier financial conditions that could prevent layoffs and defaults as the economy endures the uncertainty. While consumers have been the economic support in previous volatile periods, he warned that this time around may be different since many in the services industries are losing shifts and wages as the country goes into lockdown.
Meanwhile, credit markets are growing more cautious with Treasury yields depressed, and Tannenbaum warned of lasting effects in the more speculative-grade debt market where we will likely see defaults and bankruptcies.
Some U.S. economic data points have been upbeat, but Northern Trust has warned that the time periods do not reflect the COVID-19 downturn. We will have to watch for upcoming updates to see what areas have been hit the hardest by the coronavirus disruption.
Furthermore, Northern Trust highlighted the ongoing risks associated with the U.S.-China trade deal. China will likely fall short of its previous commitments, and the U.S. has little to gain in raising tariffs in this type of economic environment.
Financial advisors who are interested in learning more about portfolio management tips can register for the Friday, March 20 webcast here.