Unsurprisingly, U.S. manufacturing has taken a significant hit in the current environment. Regional Fed surveys are showing levels not seen since 2009, with New York posting a nearly 80% contraction this month. Still, production numbers declined less overall in March than might’ve been expected…could the same possibly hold true for April?

A few weeks ago we provided a Special Update from BCM’s Managing Partner and Portfolio Manager, Dave Haviland. At that time the market was near the depths of the first wave of the market meltdown and the future looked grim. Since then, we have experienced a short respite with a decent equity market rally and moderate slowdown of the rate of daily new coronavirus cases.

While high-frequency measures such as the New York Fed’s Weekly Economic Index have us bracing for significant losses to GDP, consensus on expectations is a hard thing to come by these days. Macroeconomic uncertainty has reached unprecedented levels and every analyst out their has their own unique interpretation…which should make for an interesting earnings season.

As we head into what is likely to be a particularly unique earnings season, signals out of the equity markets remain mixed. Transports are still down almost 30% from the print high and small & mid-caps continue to struggle, but Utilities and REITS have surged towards recovery and equities as a whole are coming off one of their best weeks in decades.

We’re taking a break from our normal Fireside Charts today in honor of the holiday week/weekend. We’ll be back on Monday with our regularly scheduled Fireside Charts! In the meantime, here is an ad from the Ohio Department of Health that perfectly illustrates the purpose of social distancing.

Stocks soared Monday on hopes that COVID-19 had reached its peak in epicenters like New York and Italy, but such rallies aren’t uncommon in bear markets, and the euphoria was short lived. Such swings may be the norm for a while now given that many companies have withdrawn their earnings guidance, leaving investment decisions more subject to headlines and sentiment.

The U.S. lost about 700,000 jobs in March—7x the expected figure and a grim way to cap off the first quarter. Still, given the staggering number of unemployment claims continuing to roll in, this may be just the beginning; the unemployment rate is expected to hit a multi-decade high over the next few months.

An unprecedented wave of unemployment is crossing the U.S. and small businesses are being hit particularly hard. Plummeting retail and restaurant activity have driven the industries to a grinding halt; both have seen a nearly 100% year-over-year drop in traffic unfold in less than a month. How will such a dramatic (and swift) change reshape our economy going forward?

And that’s a wrap on Q1. As we close out a quarter for the history books, let’s hope there are better days ahead in Q2. The recent equity rebound may have convinced some optimists out there, but with confirmed cases of Covid-19 continuing to climb and the White House warning us to brace for a “very painful two weeks,” we fear any celebration may be premature.

U.S. businesses are scrambling for liquidity in an increasingly arid market. Corporate loan balances have surged by the highest percentage on record and investment-grade bond issuance has also spiked—but could so much additional debt send us careening toward another credit crisis?