Market Vizion: Stable Markets in Unstable Times?
What's Keeping the Market Stable?
While we've got all of this uncertainty going on, how is the market stabilizing? The secret lies within a handful of massive, stable companies within the S&P 500.
So why is the market so stable? We're having all of this craziness going on, the economy is still shut down, and we're putting people in jail for opening up their businesses. Half a dozen retailers have gone bankrupt, Hertz is gone bankrupt, and Norwegian Cruise Lines is talking about possible bankruptcy.
While we've got all of this going on, how is the market stabilizing here?
Well, the answer is at this point, there's a large percentage of the S&P 500 that's made up of a few very large companies. Think companies like Microsoft, Apple, and Amazon. Big tech companies now make up over 20% of the S&P 500 market cap. Those companies have stable earnings, lots of cash, and predictable revenues. Those companies are helping the market stabilize even though there's a lot of craziness going on downstream.
That's what's keeping us a little more stable than we would anticipate right now. Given all the other things considered, we'll take it for right now. That's awesome.
Bank Loans and Mortgages Begin to Stabilize
Next, let's talk about how we've been watching mortgages and bank loans. Those assets are tending to stabilize. We're seeing them trend sideways. They've got heavy income streams tied to them right now. In some situations, for some clients with risk tolerance, we're nibbling at those positions, but really we're watching them for stability in the market.
Kim Jong-un Rumors Exaggerated
Another thing worth mentioning - congratulations to Kim Jong-un. Rumors of his demise were apparently greatly exaggerated, and it's one less thing that the market doesn't have to worry about.
(But we have to worry about murder wasps or murder hornets... or something out of, you know, the Hunger Games or something. So in any event, welcome to Jumanji and this is the next level.)
Helping Your Community in Small Ways
Also then I want to encourage you on the back end here. Go tip somebody that you tip on a regular basis, your waiter at your favorite restaurant, your hairdresser, or someone at your salon. Go buy a gift card and add a tip in cash or something like that.
These folks are starving. They're hurting, and let's all do something small. If every one of us does something small to bless them, it'll add up in a big way.
As always, we're here at. Vizionary Wealth Management with perspective for your decisions ahead. You're never an inconvenience when you call. We always look forward to hearing from you.
Have a great day. Stay safe, be responsible and be patient. We're going to get through this together. Take care.