Written by: Elizabeth Salas Evans, President & CCO at Cayena Capital Management; MFF Visiting Scholar

April 15, 2020

With over two million confirmed cases of COVID-19 worldwide, and the United States (U.S.) quickly approaching thirty thousand deaths as Americans are still digesting the loss of twenty thousand, the world is in a complete state of chaos. The U.S. National Guard has set up makeshift call centers across states, including New Hampshire, in order to support the flood of incoming unemployment claims being received. The following is a one-week chart of the Standard & Poor’s 500 and Dow Jones Industrial Average Indices. What is evident is the dislocation between stock markets and American households and small businesses. On Wall Street, layoffs and furloughs are looked at as a good thing. It means companies are “managing their balance sheets” and reducing costs. This causes stock prices to go up, usually for a short period of time, a pop. Even as companies reduce costs, there is no hiding the lack of productivity. U.S. New York Empire State Manufacturing Index reported a decline of negative seventy-eight points from the month prior, Industrial Production was down five point five percent year on year in March, Retail Sales were down over six percent for March, and Mortgage Applications were up seven point three percent for week ended April 10th, which is reflective of mostly Americans refinancing existing mortgages.

Outlook 4-15

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