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Guggenheim: Equity Market Views: May 2020

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Guggenheim recently released its May 2020 Equity Market Views.  Topics include:

Looking Back – Q1 Review

After plunging due to uncertainty surrounding the COVID-19 pandemic, markets appear to have found a bottom on March 23, and have since rallied sharply off the lows. Does this mean that the worst is behind, and the bottom is in? While we will only know the answer to that question through the benefit of hindsight, the takeaway from the recent gains is that the market is beginning to look beyond the “here and now” and is starting to discount what the environment may look like 6–12 months into the future. 

Bottoms Tend to be a Process

While markets are forward-looking vehicles and often bottom several months ahead of exiting recessionary periods, bottoms also tend to be more of a process versus a pivot. In the weeks ahead, uncertainty surrounding the economic impact associated with the coronavirus will remain elevated and we will get constant reminders of the economic damage as the March/ April data gets reported. When all is said and done, the market bottom will probably look more like a “W” or some sort of saw-toothed pattern versus a V-shape.

Positioning

Two sectors that should be considered now, and in a recovery, are Information Technology and Health Care. Information technology, specifically software, which tends to have significantly less volatility than its technology counterpart, and semiconductors, due to less dramatic inventory cycles. From an absolute basis, software provides efficiencies and greater capture of current business in a low growth economy. As a more defensive sector, health care is significantly less impacted by the coronavirus than the S&P 500® Index, as a whole.

For more information regarding Guggenheim’s May 2020 Equity Market Review and to read the full paper including UIT Investment Implications, please click on the link below:

Market Views: May 2020


Investing involves risk, including the possible loss of principal.

This material is distributed or presented for informational or educational purposes only and should not be considered a recommendation of any particular security, strategy or investment product, or as investing advice of any kind. This material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. The content contained herein is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation.

 This material contains opinions of the author or speaker, but not necessarily those of Guggenheim Partners, LLC or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy.  Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. No part of this material may be reproduced or referred to in any form, without express written permission of Guggenheim Partners, LLC.

 ©2020 Guggenheim Partners, LLC. Guggenheim Investments represents the investment management business of Guggenheim Partners, LLC. Securities offered through Guggenheim Funds Distributors, LLC.

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