Experiencing a major pullback in stocks is never a comfortable feeling. In times like these, we believe it can be helpful to set aside the daily headlines and keep perspective of how stocks have historically performed over the long term. After all, the majority of market participants are long-term investors, not day traders as the financial media would have its viewers believe.

Investors whose portfolios contain high-quality fixed income and equity positions have almost certainly seen their fixed income allocations benefit greatly in recent months, as their equity positions have suffered. Given the most recent market, equity allo

Stock market volatility has remained high as investors continue to closely track COVID-19 containment efforts while getting a glimpse into how damaging travel restrictions, stay-at-home orders, and social distancing have been on the US economy. We continue to watch for signs of a peak in new cases in the United States, which would allow investors to start thinking about a resumption of economic activity and a potentially powerful economic rebound in the second half of this year. In the meantime, stocks may revisit the March lows.

Where We Are

The war against the COVID-19 pandemic continues this week as the number of new case

Stocks pulled back this week and were unable to add to historic gains from the previous week as the war against the COVID-19 pandemic wages on. Stabilization of US cases remains elusive, though evidence has emerged that the worst of Europe’s crisis may have passed.

The S&P 500 Index lost 2.1% for the week, but remains about 11% off the March 23 lows. Among the major indexes we track, the Nasdaq was the top performer, as growth and technology-oriented stocks resumed their outperformance.

Small caps lagged large caps considerably, while growth modestly outperformed value. Energy was the top performing sector

We continue to follow our Road to Recovery Playbook for guidance in assessing the market’s bottoming process.

In recent updates, we had indicated that four of the five signals were checked off. We have a sense of the severity of the recession (#2), which now we know has arrived. Analysis of the market’s technicals and investor sentiment (#4) pointed to a “washout” with indiscriminate selling and possible seller exhaustion. And we had the “shock and awe” policy response from lawmakers in Washington and the Federal Reserve (#5) to help restore confidence and cushion the economic blow. As of the l