Stocks ended the week on a positive note, rising considerably to cap off a week of wild price swings in both directions.
After President Trump declared a state of national emergency over the coronavirus, stocks continued their strong gains in the U.S. All three major indexes rose, with the S&P 500 up more than 9% on the day. Many strategists note that bulls have been out in bits and pieces this week, buying stocks.
The S&P 500 is still 24% off of its all-time high, marking the first bear market since before the Great Recession and the end of the bull market that preceded that recession. It was the longest bull market in American history.
Here’s where things stand now:
After injecting trillions of dollars into the banking system to shore up potential recovery from a potential recession, the 10 year treasury is still a touch below 1%. That leaves stock valuations incredibly attractive against safe treasuries. Some strategists see this as a sign that the market is pricing in an imminent recession.
There may be more downside on the market, near-term, according to many strategists. But for long-term investors, Lindsey Bell, chief investment strategist for Ally Invest has a word of advice:
“If you’re a long-term investor, and already have a diversified or managed portfolio…[and] if you have cash on the sidelines you may consider using a portion of it to take advantage of cheaper stock prices.”
The Fed wants the banking system to be prepared.
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