{"id":6513,"date":"2020-04-03T13:56:39","date_gmt":"2020-04-03T18:56:39","guid":{"rendered":"https:\/\/schenkelberg.investments\/?p=6513"},"modified":"2020-04-03T13:56:50","modified_gmt":"2020-04-03T18:56:50","slug":"the-markets-crystal-ball","status":"publish","type":"post","link":"https:\/\/schenkelberg.investments\/?p=6513","title":{"rendered":"The Market’s Crystal Ball"},"content":{"rendered":"\n

I hope this newsletter finds you well. It is amazing how the world can\nchange in just a few months. The recent environment helps us remember what is\nmost important in life\u2014family, friends and health. A big thank you to my\nclients! It is a privilege to help you navigate this financial market.<\/a><\/p>\n\n\n\n

In the last newsletter the main article was titled\n\u201cHindsight is 20\/20.\u201d  In it I discussed\nhow markets are always clearer when we look back in history. Six months from\nnow March 2020 will appear and feel very different than it does now. It is\ncertain that markets can be very volatile in the short term, but, over the\nlong-term positive returns are more prevalent with the market recovering over\ntime.<\/p>\n\n\n\n

Investment Markets Are Forward Looking<\/em><\/strong><\/a>. Investors are always trying to peer into their\ncrystal ball to estimate what company values will be like in the future.\nWithout a doubt, crystal balls are very murky right now. Economic prospects are\nchanging by the day. Uncertainty can wreak havoc on investment markets.<\/p>\n\n\n\n

The longest bull market in history came to an abrupt\nhalt on February 19th, after rising 400.5% for 131.4 months, since March 9,\n2009.  From peak to trough (on March 23,\n2020) the S&P 500 price fell over 35%. Almost as quickly, the S&P 500\nprice bounced 20% from the intraday low on March 23rd<\/sup> to the\nintraday high on March 26th<\/sup>. We put some cash to work on March 25th<\/sup>.\nHowever, not all available cash was invested so we can put it to work if we get\nanother decline.<\/p>\n\n\n\n

The chart below may be familiar to those of you who have followed my\ncommentary. Stock markets tend to closely follow corporate earnings, as they\nare a significant representation of corporate value. Stock prices had\nsignificantly outpaced earnings expectations over the past year. The drop in\nstock price has corrected this imbalance and prices currently reflect a drop of\naround 15% in corporate annual earnings for this year. This level of earnings\ncorrection is certainly probable given the pause in economic activity.<\/a><\/p>\n\n\n\n

The key point to remember is that the market is\nforward looking. The number of people with coronavirus will continue to rise.\nAs the health situation worsens, shouldn\u2019t the stock market decline further?\nThe answer to this question is \u201cit may not.\u201d The initial market decline was\npredicting a dire situation. April is likely to be very volatile, but a market\nrecovery will begin before coronavirus numbers peak.<\/p>\n\n\n\n

Market prices are currently expecting many\nbusinesses to be closed through April 30th<\/sup>.  That being said, a lot is riding on the next\ncouple of weeks. Everyone is likely to get stronger cabin fever by mid-April,\nand the coronavirus impact has yet to fully develop. As these emotions peak,\nAmericans will be looking for stronger clarity on when they will return to\nwork. Any decline in uncertainty will help markets stabilize.<\/p>\n\n\n\n

Take care. Focus on what is most important and be safe!<\/p>\n\n\n\n

\"\"

<\/figcaption><\/figure>\n\n\n","protected":false},"excerpt":{"rendered":"

I hope this newsletter finds you well. It is amazing how the world can change in just a few months. The recent environment helps us remember what is most important in life\u2014family, friends and health. A big thank you to my clients! It is a privilege to help you navigate this financial market. In the […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[119,123],"tags":[],"class_list":["post-6513","post","type-post","status-publish","format-standard","hentry","category-market-commentary","category-market-performance"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p7kXxe-1H3","jetpack-related-posts":[{"id":6186,"url":"https:\/\/schenkelberg.investments\/?p=6186","url_meta":{"origin":6513,"position":0},"title":"Key Market Thoughts Given Recent Market Decline","author":"J.J. Schenkelberg, CFA","date":"February 6, 2018","format":false,"excerpt":"Key Market Thoughts Given Recent Market Decline - This is a normal correction within equity markets. We just haven't seen one for a while. \u2022 The S&P 500 remains above November values (less than 3 months ago) - your portfolio value likely remains well above where it was one year\u2026","rel":"","context":"In "Financial Planning"","block_context":{"text":"Financial Planning","link":"https:\/\/schenkelberg.investments\/?cat=122"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6642,"url":"https:\/\/schenkelberg.investments\/?p=6642","url_meta":{"origin":6513,"position":1},"title":"Inflation and I-Bonds","author":"J.J. Schenkelberg, CFA","date":"October 18, 2022","format":false,"excerpt":"Stock and bond markets have had a rough ride so far this year, to say the least. The number one influence on prices has been inflation. 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Schenkelberg, CFA","date":"November 30, 2016","format":false,"excerpt":" Third quarter performance of the general equity market was marked by calm markets followed by Federal Reserve driven\u2010volatility. Prior to the Federal Reserve beige book report in September, equity markets were quite calm, as measured by the CBOE VIX index (Chicago Board Options Exchange Volatility\u2026","rel":"","context":"In "Market Commentary"","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"screen-shot-2016-11-30-at-12-21-46-pm","src":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2016\/11\/Screen-Shot-2016-11-30-at-12.21.46-PM-300x136.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":6138,"url":"https:\/\/schenkelberg.investments\/?p=6138","url_meta":{"origin":6513,"position":3},"title":"3Q 2017 Market Update – Disaster Planning: Are You an Ostrich or an Eagle?","author":"J.J. Schenkelberg, CFA","date":"October 25, 2017","format":false,"excerpt":"Needless to say, the third quarter of 2017 was marked by significant disaster or threat of disaster. Major hurricanes rocked Texas, Florida and the Caribbean, and North Korea tested missiles over Japan while boasting threats of war. The start of the fourth quarter has been marked by the largest mass\u2026","rel":"","context":"In "Market Commentary"","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6302,"url":"https:\/\/schenkelberg.investments\/?p=6302","url_meta":{"origin":6513,"position":4},"title":"Market Update – First Quarter 2019","author":"J.J. Schenkelberg, CFA","date":"April 12, 2019","format":false,"excerpt":"U.S. Versus International The S&P 500, an index of large U.S. companies, posted a total return of 13.6% for the First Quarter of 2019. U.S. stocks outperformed international for the quarter as measured by the All Country World Index ex-U.S. stocks, a representation of international stocks outside the U.S. Total\u2026","rel":"","context":"In "Market Commentary"","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6903,"url":"https:\/\/schenkelberg.investments\/?p=6903","url_meta":{"origin":6513,"position":5},"title":"Stocks Continue to Rise Despite Very Low Consumer Sentiment","author":"J.J. Schenkelberg, CFA","date":"October 7, 2025","format":false,"excerpt":"Stocks hit all-time highs near the end of the third quarter. The S&P 500 Index ended the third quarter at 6,688, with a price to earnings ratio (P\/E) of 22.8x. This is a lofty P\/E compared to the 30-year average of 17.0x. However, it is not as high as the\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2025\/10\/image-3.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2025\/10\/image-3.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2025\/10\/image-3.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=\/wp\/v2\/posts\/6513","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6513"}],"version-history":[{"count":1,"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=\/wp\/v2\/posts\/6513\/revisions"}],"predecessor-version":[{"id":6515,"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=\/wp\/v2\/posts\/6513\/revisions\/6515"}],"wp:attachment":[{"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/schenkelberg.investments\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}