This is what Crisis and Panic feel like. It’s not fun and it’s not pretty. It is a wild roller coaster ride, with no end in sight.

Things will get better…eventually, but it looks like it is going to be a while. A stricken world has hit the pause button and the damage is everywhere. Nothing seems normal.

We would like nothing more than to believe that the economy is going to snap back quickly from this situation, but that just does not seem logical. It is going to take a while for the economy to get to normal and there are just too many possible scenarios for the virus situation for us to feel confident that things are going to improve quickly.

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In the midst of this chaos, we’re all searching for certainty. Whether it be certainty on when the spread will slow down, when the financial markets recover, or when normal life can resume. As we look outward, and inward, two ideas can help ease the financial market turbulence by exposing the market’s reaction for what it is: a normal part of investing. Aided by previous stock market performance, certainty will begin to emerge. These two ideas are: 1.) the Black Swan; life is more random than we think and therefore more prone to extreme events than we predict and, 2.) the Planning Fallacy; we’re bad at planning and projecting events into the future. Simple as that, these two ideas will have major implications for how we react to the market and prepares for what’s next.

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Leveraged loans have been hit particularly hard in this market panic. eerily similar to 2008. What was initially characterized as short-term pain to stem the spread, the economy, and the financial markets are going to take longer to heal than we all hoped.

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In line with this month’s market commentary, following the depths of the market’s sell-off in March, major indices across the world are telling disparate stories. A positive (although relative) job’s report for May and belief in the resilience of technology has set the NASDAQ to new heights and buoyed the S&P 500 to near even on the year. While we call can vividly describe the expanded use of technology under “stay-at-home” conditions, one has to wonder how well these gains can survive if other major areas of the economy remained depressed. Major components of the NASDAQ; Apple, Microsoft and Google rely considerably on consumer and business spending to support product sales and advertising spend. Prolonged depressed business conditions suggest a meaningful portion of their demand could be hampered for the remainder of the year, questioning how well such a rally can last.

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