Newsflash: Lockdown – Day 1

Newsflash: Lockdown – Day 1
lockdown market equity
Source: Bloomberg, *time of writing 06h30, 2020-03-27

As we start the first day of Lockdown, our thoughts go to those who may be sick and struggling with the disease. We then think of the millions whose livelihood is threatened by having to stop working. Lastly, we think of those that will be continuing to expose themselves to the virus by maintaining essential services.

Markets were again up firmly yesterday, making it three days in a row, the best for the S&P 500 since the 1930s. Technically US markets have started a fresh bull market, having risen 20% from the bottom. There is no precedent for such volatility, but there is no precedent for the stimulus thrown at the problem. The ALSI has behaved in line with global markets. So far it is +19% since reaching a low of -33% one week ago. Hence the market is -20% year to date.

All of this occurs while governments follow different approaches to contain the virus. In the US, many states are in some form of Lockdown; the Federal government is debating relaxing this cognisant that the number of US infections has surpassed that of China. Other countries, including Australia, have not entered Lockdown and people are still socially mixing. This confusion in response is likely to maintain the volatility of markets.

For more information contact:

Greg Flash
Chief Investment Officer
e. greg@cinnabarim.co.za, c. +27 72 668 8964
FSP Number 45402, w. www.cinnabarim.co.za
Cinnabar Cape Town, 298 Main Road, Kenilworth, 7708

Windall Bekker
Head of Distribution
e. windall@cinnabarim.co.za, c. +27 72 191 0492
FSP Number 45402, w. www.cinnabarim.co.za
Cinnabar Cape Town, 298 Main Road, Kenilworth, 7708