After Dow's best day since 1933 yesterday, a $15 billion fund manager urges caution. (via TradingNation)
"I don't think there's any question we're already in a recession. We're going to see unemployment climb through the roof. We're going to see job losses and companies closing," said Spika. "The real question now is how long does it last. And I think that'll be a function of when we start to see a peak in COVID-19 cases or if there's a vaccine produced.
Until then, Spika said it serves to be cautious and invest in areas that can weather economic downturns. "It's important to continue to stay defensive and, by that, I mean high-quality companies with strong balance sheets, with earnings visibility that tend to be lower beta and those companies are lagging [Tuesday] but over time, they're going to outperform as we work through this difficult process," said Spika.
Even if markets form a bottom here, Spika warns of a long period of volatility before the dust settles. He favors defensive sectors such as consumer staples and health care as well as grocery chains such as"Then, certain technology companies that are really benefiting from the working from home, and from people having free time or having to access technology tools from their homes … I think these are places, these are the kinds of companies that will continue to do well," he said.
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