Investors are set to shelter-in-place as coronavirus bears down on the U.S. economy.
For companies used to predictability -- and a Wall Street that just a few weeks ago was enjoying a historic bull run -- the stay-at-home restrictions imposed by more than 40 U.S. states have introduced a new, altogether different type of unpredictability into market forecasts.
“We knew that this year was going to be volatile,” said JP Maroney, Founder and CEO of Harbor City Capital. “We’ve been talking for the last few months that investors should expect some kind of correction, but we didn’t expect it to happen this way.”
“We’re in a situation we’ve never seen before,” said Maroney.
Markets closed out yet another week lower, with the Dow losing 2.7 percent in value just this week. The S&P 500 also fell 2.08 percent, and the Nasdaq Composite ended the week 1.72 percent lower.
It’s a disappointing end to the week -- but perhaps not as violent as the triple and even quadruple point swings seen on the Dow over the past two week, and comes despite a dire March jobs report. But with coronavirus shutdowns bringing the U.S. economy shuddering to a halt, market monitors say uncertainty is set to be the only certainty in markets.
“Everything is a moving target right now,” said Rich Steinberg, Chief Market Strategist at The Colony Group. He says the market has lurched from a solvency problem to an earnings problem, with suspended guidance from companies adding to the gloom and uncertainty.
Chad Oviatt, Director of Investment Management at Huntington National Bank, says he expects market and economic volatility to continue throughout the coronavirus crisis. “Once we get through peak U.S. cases, we may have cooler markets,” said Oviatt. “We’re not thinking about a long, protracted type of recession.”
And in terms of immediate actions, the best advice might be to treat markets like a lockdown--and not do anything right now.
“There’s an old saying that says ‘never try to catch a falling knife,’” said Maroney. “I think people who are trying to predict where the bottom of this thing is are going to come up with very bloody fingers.”
