It’s a new dawn, a new day, a new life

Good morning,

I trust everyone had a wonderful Easter weekend and found a way to keep up some of your special holiday traditions.

Easter morning is always fun in our house……the Easter bunny (aka Jennifer) is so amazing at leaving riddles and clues for the girls to hunt down eggs, and this year was quite exciting for them as it was their brother Bowie’s first holiday. This year, Easter weekend seems to be upon us during a meaningful time in our lives given all of the challenges and uncertainty around us. For me, Easter is always aligned with Spring season; a transitional season of beauty, resurrection, restoration and renewal.

As Nina Simon suggested…….it’s a new dawn, a new day, a new life….

Heading into a new week we are all well positioned for progress, it’s an excellent week to start to feel optimistic on all fronts and “feelin’ good”

Coronavirus

The past week has delivered some confirmation of the positive signs that emerged in Europe last week. Specifically, we’ve seen a slowing rate of new infections across countries such as Italy, Spain and Germany, among others. To be clear, there are still new infections being announced daily. Unfortunately, many people are still losing their lives every day. But the rate of change is improving and this potentially bodes well for the weeks to come. The hope is that North America will also experience this relatively soon. There have been some early signs in the state of New York, the epicenter of the crisis in the U.S., that suggest new cases may no longer be accelerating at the pace of a week ago. More evidence is needed nationally and across Canada to confirm that an improving trend is indeed in place.

Exit strategy

Another important development occurred this week in the Chinese city of Wuhan, the original epicenter of the coronavirus crisis. Officials there lifted the lockdown that had been in place for 76 days. This is a meaningful milestone. But it also represents the beginning of a new chapter in this saga, namely one of recovery. And with it come many questions that are likely to weigh on the minds of most citizens, households, business owners, investors and government officials. What does life look like after a peak in this health crisis? Does everything reopen at once? What restrictions, if any, are still needed? Will people’s behavior be any different? Does economic activity bounce back sharply or gradually? In some ways, this is a concern for another day as we are still in the middle of a serious crisis, where the welfare of our family, friends and clients are top of mind. But these are questions that equity and bond markets will have to grapple with in the not-too-distant future.

Looking forward

We continue to be very well positioned, for both managing risk and taking advantage of opportunities. A few weeks ago, volatility was extreme and markets were selling off sharply. More recently, volatility, while still elevated, has moderated and equity markets have retraced some of their losses. This has happened despite terrible economic data that has illustrated the extent of the global shutdown. It has served as a good reminder that markets tend to be forward-looking in nature. While the data is likely to remain poor and even worsen in the weeks to come, investors have grown hopeful that a peak in the healthcare crisis is near and a return of economic activity may be on the horizon by the summer. But much uncertainty remains given the exit strategies discussed above that remain unknown at this point. As a result, we continue to be positioned for volatility to remain elevated in the months to come but we are certainly being opportunistic and adding exposure over the las few week. Remember, it’s alight to be enthusiastic about this market – we are well positioned for growth as we enter the season of new beginnings.