Adjusting our Playbook After the Bounce

  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 late-March lows, we had believed a recession had been priced in (#3), but after the recent bounce, we have moved this back to ‘Almost There’ from ‘Already There.’

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