U.S. market held ground reasonably well in the past week. S&P 500 rose 3.04% during the week to close at 2,874. Dow Jones Industrial Index increased by 2.21%, Nasdaq rallied 6.09% while Russell 2000 was slightly down by 1.41%. Crude Oil plunged by (-21.7%) to close at $18.2. VIX too fell by 8.45% on signs of stabilization.
A ray of hope for combatting COVID-19
Before we dive deeper into the market, here is some (hopefully) good news. As per recent reports by CNBC and Bloomberg, there has been news that the Gilead drug called Remdesivir has shown promising results in treating small groups of COVID-19 infected patients.
The report first broke out on Stat News that a Chicago hospital was treating severely ill COVID-19 patients with Remdesivir. The report mentioned that most patients treated using the drug had recovered and were discharged.
While the results are still preliminary and need further validation, we hope the drug holds promise in this global fight to recover from the Coronavirus.
Gilead shares (NASDAQ: GILD) were up almost 10% on Friday and have risen 29% in the year so far.
Opening up America
On Thursday evening, markets rose in reaction to an announcement by U.S. President Donald Trump to reopen the U.S. economy.
President Trump gave governors a road map for recovering from the economic pain of the coronavirus pandemic, laying out “a phased and deliberate approach”. He mentioned that the governors would call their own shots as they open up the economy in a “gradual process“.
The guidelines mention three specific “phases” to opening up the economy – strict social distancing, limited gatherings, and identification & isolation.
Charlie Munger on Berkshire Hathaway
Mr. Charlie Munger, vice chairman of Berkshire Hathaway Inc. and Warren Buffett’s long-time business partner, shared his views on the markets and the overall economy in an article published in the Wall Street Journal on Friday.In his typical anecdotal style, Mr. Munger said he intends to stay put as Berkshire tries to weather the current ‘coronavirus typhoon’. He mentioned his preference to stay calm and not be aggressive on deals.
He was quoted saying “We just want to get through the typhoon, and we’d rather come out of it with a whole lot of liquidity”.
Berkshire Hathaway was sitting on about $128 billion of cash at the end of 2019, giving it enough gun-powder to play with, as deals become active.
Berkshire Hathaway Class A shares (NYSE: BRK.A) currently trade at $2,84,400.
The more liquid, Class B share (NYSE: BRK.B) currently trades at $191. BRK.B shares are down 16% so far this year but have risen almost 10% in the past 30 days.
Berkshire Hathaway is a stock to watch out for as clarity develops on the economy and global recovery is underway.