As I write this from my apartment in Manhattan, the city is unrecognizably quiet. The tension is broken with an occasional siren or helicopter, and as the city’s nine million inhabitants grapple with severe human and economic losses, many are wondering what kind of city will emerge from lockdown.
The next 45 days will be critical as the US attempts to reawaken the economy. We anticipate ongoing volatility as the markets seek to determine the shape of recovery. It will be hard to predict the aftershocks, but one thing is clear – US investors are glued to their screens and looking for opportunities.
In the last few weeks, we have spoken to more than 100 US investment managers from institutional, private wealth institutional and family offices – as well as venture capital and private equity, sell-side analysts and investment banks. These are our conclusions.
- The swift action by the Fed and Treasury was viewed positively by investors.
- Investors are sticking to investment fundamentals and buying opportunistically.
- Private wealth funds with longer-term investment cycles are buying more aggressively.
- Small caps are in focus, but balance sheet strength and liquidity remain important.
- There is notable interest in smaller-cap healthcare and large-cap tech stocks.
- Most US investors are buying in smaller position sizes over a protracted period rather than trying to predict the floor in stock prices.
- Private equity continues to invest through market volatility.