April 30,2020

Markets backed off somewhat on Thursday with the S&P 500 down 0.9% and Toronto was down 2.9%.

Wells Fargo has stopped accepting new applications for home equity lines of credit. J.P. Morgan had stopped in mid April. Many millions are out of work in the U.S. Some of that will be quite temporary but some of it will be more permanent. The fallout in terms of defaults on loans remains to be seen. The market may be underestimating such fallout.

Canada’s deficit is now estimated to come in at $250 billion. Little to no attention has yet been paid to the impact of that.

Keeping some cash on hand in case markets retrace some of the recent gains is probably a prudent strategy. 

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