Over the last several weeks, stocks have rallied to erase most of this year's losses. The optimism in the stock market has been at odds with economic data signaling that the pace of the global economic recovery following the coronavirus pandemic is likely to be slow and uneven.

Activity being deliberately frozen and halted has forced consumers, businesses, and investors to change the way they live and operate for a considerable period. This leads to the question of whether consumer, corporate, and investor behavior will change permanently.

At the moment, we are operating in what is probably the noisiest market that many investors have ever seen. Market moves and government actions that seemed unthinkable a few weeks ago are now daily occurrences. Currently, there is not a lot of visibility on the trajectory of Covid-19 and the breadth and depth of its impact.

A lot has happened since our last commentary several days ago. The coronavirus has been declared a pandemic by the World Health Organization. The speed at which the Covid-19 disease is spreading has led authorities (on national and community levels) to take strong measures including closing borders, schools, and businesses, as the center of the pandemic shifts to Europe and the U.S.

Financial market volatility has reached levels not seen since the global financial crises in 2008. The severe market turmoil has been due to concerns about the significant drop in business activity and global trade from escalating efforts by public-health authorities worldwide to contain the coronavirus outbreak.

After such a strong year for stocks with the U.S. stock market once again reaching new all-time highs, many investors are wondering whether they should stay invested. A common concern is that the stock market is likely to come back down from such a high current level, especially given the uncertainty surrounding trade policy, Middle East tensions, and the upcoming U.S. presidential election.

With 2020 U.S. election campaigns now gearing up and the U.S. stock market near “all-time highs” once again, many investors are asking whether now is a good time to reduce risk or get out of the market altogether.

The yield curve is often used as recession gauge because when it inverts (i.e., short-term rates are higher than long-term-rates), it is typically proceeded by an economic slowdown. This past March, the 3-month-to-10-year part of the curve briefly inverted.

Today, it is apparent that all of this trade conflict and policy uncertainty has negatively impacted corporate costs, supply chains, and investment planning; recent comments from company CEOs and declining stock prices are some proof of this.

During the last three months of 2018, stock markets around the world sold off as investors became increasingly apprehensive about a global economic slowdown.

It's always hard to pinpoint exactly what causes market volatility like what we've experienced recently.

The upcoming U.S. midterm elections in November are going to be a center of focus for their potential impact on U.S. policy, the economy, and corporate earnings. The uncertainty that comes with political events typically causes market volatility

Recent announcements by the Trump Administration on the imposition of tariffs on imports from China, Canada, Mexico and Europe has undoubtedly increased the likelihood of a trade war.

Given the potential risk of disrupting the economy, we believe that there is a low likelihood that the current administration will significantly alter U.S. trade policy.

Stock markets have risen since February 2016 without any significant disruption until now.