Welcome to edition 507 of Insider Weekends. The Coronavirus has reached our shores and appears to be spreading across multiple states leading to several large companies including Apple (APPL), Twitter (TWTR) and Palantir asking their corporate employees or employees at West Coast offices to work from home. We are also seeing universities like Stanford and University of Washington shift classes online and there have been at least a couple of K-12 school closures in Northern California.
The markets shrugged off a 50 basis point drop in interest rates and the S&P 500 almost ended flat for the week, although with several large swings in both directions all week long. We wrote the following in our last Insider Weekends article,
With community spread in the U.S., we have now gone past the risk of second order effects and are now going to experience first order impact, whether perceived or real. I expect to see further market declines and if that does transpire, there would be some interesting opportunities in the weeks ahead. I started positioning my portfolio for these events a couple of weeks ago and will elaborate more in a premium post this week.
At risk of missing some opportunities on the long side, I would prefer to stay patient and wait for the situation to unfold. Insiders on the other hand have stepped up their buying as they usually do in downturns. They are probably early this time but their buying will bring some interesting opportunities to light.
My opinion has not changed and the next few weeks are likely to remain challenging. Futures are pointing to a very red open on Monday.