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Market Watch Weekly | May 15th, 2020 | Long Weekend Quarantine Experiment: Ordered A Chicken & An Egg From Amazon... Stay Tuned.

Erik Dekker - May 15, 2020
North American markets gave back some recent gains this week as investors wade through economic data and a re-opening global economy. Having progressed from the throes of March's historic market sell-off into the unfamiliar territory...

North American markets gave back some recent gains this week as investors wade through economic data and a re-opening global economy. Having progressed from the throes of March's historic market sell-off into the unfamiliar territory of emerging from a national quarantine, the central question has become "How long will it take to recover?"

We are optimistic, but must also realistic. Stocks have rallied sharply off the March lows aided by some signs of progress on the health care front and aggressive policy responses. Bear-market rallies are common (though this is the strongest one in any bear market of the last 75 years), and the good news is that they often occur in the latter half of bear markets. At the same time, this rally has been spurred by anticipation of the reopening of the economy. We think the restart will be protracted and not advance at a uniform rate across all sectors. It is to be expected that periodic disappointing economic readings would likely to be met with spurts of renewed market volatility. That said, we continue to believe that short-term pullbacks present compelling rebalancing or buying opportunities within the context of the longer-term recovery. History has shown, time and time again, that buying weakness proves advantageous for long-term investors.

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