On Wednesday the New York Stock Exchange announced that it will be closing the NYSE equities trading floor and the NYSE American Options floor, both in New York, and also the ARCA Options floor in San Francisco. The reason for the closings is that two employees were discovered to have the COVID-19. It is critical to note that TRADING WILL NOT BE HALTED and will continue on the electronic platforms.

Although electronic trading has been in use for some time and has an excellent history of reliability, the physical trading floors have always run in tandem. Beginning Monday, this will not be the case and the electronic trading will be the only platform, at least for a few days.

As you might expect, some people are nervous. Some are even calling for a suspension of trading until the physical floors can re-open. We think that would be a terrible idea. People need smooth access to their money and markets need to be open to transmit a free flow of information. So, let’s keep our wits about us.

As in every other crisis in our history, we will get to the other side. We always do.  Things may be a bit different on the other side but markets and the economy have always recovered, sometimes slowly and sometimes rapidly. Most readers of this newsletter will recall the financial shocks of the dotcom bust as well as the Lehman Brothers or Enron, or Long-Term Capital Management disasters. And, of course the devastating effects of the 2008 Global Financial Collapse. But recoveries can also happen much faster than expected. The tragic and horrendous events of 9 -11 took the markets down by 20% in five days. Just over a month later, that 20% had been recovered.

Still, Monday’s crash was historic. So was last Thursday’s, March 9 and February 28. Exactly a month ago, the markets were a day removed from an all-time high. Now indexes* are down almost 30%. The speed and depth of the carnage has few precedents in a market now dominated by computer trading. As I have said before, this decline was not completely unforeseen. A lot of the market was ‘priced to perfection’ and it was not known if earnings growth would continue to support the PE levels. However, if such a correction were to have occurred it would have done so over months and not weeks. The coronavirus brought its own clock and calendar.

For those who think the Fed is “out of bullets” because interest rates are now at zero, you will be proven wrong sooner than later. They have many special programs to help keep capital moving and markets working.

Although we have been reaching out to you, we are surprised and our hearts are warmed at your thoughtfulness. Our wonderful clients have emailed and phoned to ask if we’re doing ok.  Thank you so very much for the kindness. We’re fine — mostly working from home, but quite available by video conference or phone so know that we’re here for you – even if you just want to chat.  Client portfolios are fortuitously invested in enough cash to cover planned distributions, in Nasdaq stocks which have held up much better than Dow and S&P stocks, and in the stronger areas of tech stocks and healthcare – the areas expected to bounce back the strongest.

And last and not least, remember that ‘this too shall pass’.

On that note, let’s turn to some of the good news. Tony received the email below from Peter Diamonds, a confirmed optimist.

In addition to an engineering degree from MIT Peter also has a medical degree from Harvard which may lend some credibility to his views.

The complete email with links is below.  I hope you find it encouraging.

Warm Regards,

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com

This weekly article reflects news, commentary, opinions, viewpoints, analyses and other information developed by Denk Strategic Wealth Partners and/or select but unaffiliated third parties. DSWP provides Market Information for illustrative and informational purposes only. If you wish to receive this weekly commentary by email please contact us at 602-252-8700 or by e-mail at lindaw@denkinvest.com. If you are receiving this commentary via email and would prefer not to please let us know either by email or phone.

Ronald Denk is an Advisory Representative offering services through Denk Strategic Wealth Partners, A Registered Investment Advisor. He is also a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation. Information in this commentary is the sole opinion of Denk Strategic Wealth Partners. Past performance is no guarantee of future returns. All market related investments involve various types of risk, which include but are not restricted to, credit risk, interest rate risk, volatility, going concern risk, and market risk.

The Update provides information of a general nature regarding legislative or other developments. None of the information contained herein is intended as legal advice or opinions relative to specific matters, facts, situations or issues. Additional facts, information or future developments may affect the subjects addressed in this document. You should consult with an attorney, accountant or DSWP planner about your particular circumstances before acting on any of this information because it may not be applicable to your situation.

Lincoln Financial Securities and Denk Strategic Wealth Partners and their representatives do not offer tax advice. Please see your tax professional regarding your individual needs.

*The indices are representative of domestic markets and include the average performance of groups of widely held common stocks. Individuals cannot invest directly in any index and unlike investments, indices do not incur management fees, charges, or expenses, therefore specific index returns will be higher. Past performance is not indicative of future results.

LFS-3004595-031920

From: Peter Diamandis
Sent: Wednesday, March 18, 2020 10:13 AM
Subject: Good News About the COVID-19 Pandemic

How about some good news for a change?

There have been A LOT of facts going around regarding COVID-19, and a flurry of “positive news” items to lift our spirits.

Here are a number of major victories from the Pandemic line. I’ve had my team fact-check these wins with links you can follow up on.

(1) Vaccine development: An experimental vaccine developed by Moderna Inc. began the first stage of a clinical trial on Monday, with testing on 45 healthy adults in Seattle. [link]

(2) China’s new cases plummet: China has now closed down its last temporary hospital built to handle COVID-19. Not enough new cases to warrant them. [link]

(3) Drugs that work: Doctors in India have successfully treated two Italian patients with COVID-19, administering a combination of drugs — principally Lopinavir and Ritonavir, alongside Oseltamivir and Chloroquine. Several are now suggesting the same medical treatment, on a case-by-case basis, globally. [link] [link]

(4) Antibodies to the rescue: Researchers at the Erasmus Medical Center claim to have found an antibody that can fend off infection by COVID-19. [link]

(5) 103-year-old recovery: A 103-year-old Chinese woman has made a full recovery from COVID-19 after being treated for 6 days in Wuhan, China, becoming the oldest patient to beat the disease. [link]

(6) Stores re-opening: Apple has reopened all 42 of its Apple retail stores in China. [link]

(7) Test results in 2 hours: Cleveland’s MetroHealth Medical Center has developed a COVID-19 test that can now deliver results in just two hours, rather than in a matter of days. [link]

(8) South Korea’s dramatic drop in new cases: After its peak of 909 newly reported COVID-19 cases on February 29th, South Korea has now seen a dramatic drop in the number of new cases reported daily. [link]

(9) Mortality rates inflated? Experts predict that Italy has seen a higher mortality rate of COVID-19 given its significant aging population, as well as its higher percentage of COVID-19 patients with pre-existing health conditions. This might suggest that COVID-19’s fatality rate may have been slightly more inflated than previously thought for the general population. [link]

(10) Israeli vaccine development: More than 50 scientists in Israel are now working to develop a vaccine and antibody for COVID-19, having reported significant breakthroughs in understanding the biological mechanism and characteristics of the novel coronavirus. [link]

(11) Full recoveries: Three patients in Maryland who tested positive for COVID-19 have now been reported to have “fully recovered.” [link]

(12) Isolated virus: A network of Canadian scientists isolated the COVID-19 virus, which can now be replicated to test diagnostics, treatments, and vaccines. [link]

(13) Yet another vaccine in the works: San Diego biotech company Arcturus Therapeutics is developing a COVID-19 vaccine in collaboration with Duke University and National University of Singapore. [link]

(14) Treatment protocols: Seven patients who were treated for COVID-19 at Jaipur’s Sawai Man Singh (SFS) Hospital and Delhi’s Safdarjung Hospital in India have recovered. The treatment protocol will be widely scaled to other hospitals. [link]

(15) Another treatment: Plasma from newly recovered COVID-19 patients (involving the harvesting of virus-fighting antibodies) holds promise for treating others infected by the virus. [link]

Some of COVID-19’s hardest hit nation victims are already emerging strong after peak infection, and biomedical innovators are tackling the virus at unprecedented speeds.

IMPORTANT TO REMEMBER… While everyone is concerned about the super-high mortality rate of this virus — which is calculated by the “number dead” divided by “the number who have tested positive” (currently ~8,000/200,000) — the denominator, i.e. the number infected is actually VERY hard to know because so few people have been tested.

It may well be that 10x more are infected but subclinical. So is the mortality rate 4% or 0.4%?

We will find out as large scale-testing comes reliably online.

Wishing you the best. Remember that our most important tool during times of panic and crisis is our mindset.

Best,

Peter