Have you been listening to our conference calls? We’ve been having them every week to touch base with clients and the public at large. You can listen to all of our audio content, here. If you have been listening in, you may remember that the market crisis in February and March was inflamed by undue pressure within the energy markets. Specifically, an undercutting price war started up between Saudi Arabia and Russia, and it dragged the rest of the energy sector into the fray.
On Monday, it looks like a ceasefire was called by major oil producers. OPEC countries and key allies have agreed to reduce oil production by 10 million barrels a day, which ought to stifle some of the inventory glut caused by the lack of energy consumption.
There are still major problems with the markets including overconfident valuations inside equities and liquidity issues within fixed income. There are still long-term secondary effects to the economy which have yet to be understood, including the weakened future demand for commercial real estate. Most importantly, the public health issue remains unresolved and the situation will be unstable for a long while given the ongoing abdication of national coordination.
Still, we’re encouraged by progress when we see it. Given all this flux the world is dealing with, progress simply means stability right now. Lowering the rate of change to a manageable level during a crisis is a good first step to influencing the outcome and avoiding the worst-case scenario. We are heartened that at least one erratic factor has been fixed for the time being.