Tuesday markets ignored the virus situation as the S&P 500 went up 1.3%, the Dow Jones Industrial Average was up 2.1% and Toronto was up 1.7%. I can’t help but wonder if investors are “whgistling past the graveyard” in ignoring the virus situation in the U.S.
Some of the larger gains were: Toll Brothers up 4.7% and Berkshire Hathatway up 3.0%.
Wells Fargo cut its dividend by 80% after reporting a large loss due to loan loss provisions. The concensus thinking in Canada is that the big banks here will NEVER cut their dividends. But in investing as in life one should never say never. It may be unlikely that the Canadian banks will need to cut their dividends, but it is not completely out of the question. It’s always been my belief that bank management and bank regulators have basically a sacred duty to protect depositors. Impacts on investors and on the economy should take a back seat if banks need to preserve capital in order to protect depositors. After all, investors signed up for risks, depositors did not.