Reopenings Spark Hope in the Markets, Corporate Debt Looms, and Conflict with China Reignites

New York Governor Andrew Cuomo rang the bell to mark the reopening of the NYSE yesterday and the markets were quickly off to the races; the S&P 500^® Index even briefly topped the 3,000 level and its 200-day moving average. But U.S. equities—though still far outpacing the rest of the world—are at historic concentration, and it could spell trouble for the future. For now though, many economic indicators are sending positive signals as states begin to emerge from quarantine and activity picks back up. The long-beleaguered manufacturing sector has started to stabilize (even in New York) and the housing market remained surprisingly resilient in April, topping analyst expectations. Meanwhile, could climbing corporate debt and increasing incidences of forbearance create a crisis for both borrowers and banks? Credit agencies seem to think so and aren’t being shy with ratings downgrades… have you checked your portfolio lately? Finally, the trade war may have been bumped from the front page as COVID-19 emerged as a global threat, but the conflict is far from over and China may have just made another move. Infection rates are still staggering, even as states begin to reopen, so let’s hope our government is prepared to multi-task.