The fatigue of this crisis is very likely weighing on you, as it is on so many of us. On the west coast, we are all now being directed to “stay home and stay healthy.” That might sound kind of fun for a brief “staycation”. Stay home, get a head start on your spring cleaning, do some yardwork, order takeout and watch Netflix. But the prospect of living under these circumstances for weeks on end is rather daunting.

Yesterday the stock market sank again. The Dow Jones industrial Average dropped 580 points, or 3%. The S&P 500 Index came down 68 points, also about 3%.

The market is driven by emotion, but just as much, or perhaps more so, by economic fundamentals. The sentiment in the “herd”, that is all investors collectively, is that news about the coronavirus outbreak remains disturbing. Testing is still inadequate. Medical supplies are in extremely short supply. Health workers are incredibly stressed and overworked. Proper social distancing is being practiced by too few. The rate of infection in the US is climbing at an alarming rate. It is worse in Europe. The death count here is increasing at an accelerating rate. … All bad news for investors to absorb.

This week we will begin to see hard data that will inform us about the extent to which this health crisis and our reaction to it has impacted our economy. We will get reports on economic output, orders for durable goods, employment (i.e. jobless claims), consumer spending and consumer sentiment. We should expect these numbers to rather discouraging.

We went into last weekend expecting the Congress to pass a massive $2 trillion fiscal package that would provide relief for millions of workers and shore up industries vital to the American economy. As of our writing, the Senate and the House have not passed such legislation. Such inaction, as the economy continues to crumble under incredible strain, is disheartening.

There are some glimmers of hope. The Federal Reserve has stated that it will make unlimited purchases of financial assets to support the economy. Interest rates are now pegged at zero and this will make borrowing easier for both businesses and consumers. But the Fed cannot fix this crisis without a strong and enduring fiscal response from Congress.

We continue to have frank and productive conversations with our clients, including many of you. We are encouraged by your patience and your resilience. These are trying times for investors who are experiencing one of the greatest crises in American history.

We will get through this. Keep the faith, be safe, and stay healthy.

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