Market Recap Week of 16/03/2020

Dear clients,

I hope that everyone is staying safe and that you are spending time with your loved ones.

As we close off another record-breaking week for equity markets and volatility, we would like to share some timely commentary :

We live in an environment that none of us have experienced in our lifetime. The sudden stop of economic activity related to public policy efforts at containing the COVID-19 spread has put a number of economic sectors and financial markets under stress.

The silver lining is that the aggressive social distancing policies are likely to start working in the coming weeks (if China’s experience is used as a guide), which we hope will help capital markets find their footing.

In addition, the potential economic and market recovery is likely to be supported by the “whatever it takes” monetary and fiscal policies currently being adopted in the U.S. and Canada. We are already seeing great investment opportunities with the sharp correction in valuations that has been largely undiscriminating.

In our opinion, financial services and financial technology stocks are already priced for a normal recession. The risk that keeps us from pulling the trigger at this point is the still unknown duration of the epidemic, which will ultimately determine the severity of the recession we appear to have entered.

Until we see evidence that new COVID-19 cases are declining and the epidemic is getting under control, we’ll remain in a capital preservation mode. At the same time, we continue to have conviction in the resiliency of all our clients portfolios and their ability to weather this storm.

If you have any questions, please call our office at 514-360-1114.