Strategy

The U.S. Food and Drug Administration (FDA) has issued Emergency Use Authorization (EUA) to the Abbott test for the detection of novel coronavirus (COVID-19), delivering positive results in as little as five minutes and negative results in 13 minutes. Through different platforms of the company, Abbot is aiming to produce 5 million tests per month. With a stellar 2019 on the books, Abbott is expecting another strong showing this year. In its full-year guidance for 2020, the company is projecting that organic growth will again fall between 7% to 8%. In 2019, organic growth for the year came in at 7.7%. With good revenue diversification and multiple segments showing strong sales growth, the healthcare stock is a good option for risk-averse investors.

Stocks have again fell across the world as US President Donald Trump abandoned his plans for an early opening of the US economy by Easter. The number of Corona virus infections show no sign of abatement with the number crossing 750,000 world-wide and European epicenter Italy has reported more than 10,000 deaths. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases in United States has painted a bleak picture with he predicting that number of cases in United States could reach millions with deaths in the range of 100,000-200,000. Meanwhile, People’s Bank of China has reduced the rate on 7 day reverse repo to 2.2% from 2.4% which is the biggest reduction in nearly 5 five years. SPX 500 had a stellar performance last week, but it would be tough to repeat that performance in the medium term as the number of infections is not slowing down and it is wreaking economic havoc. With volatility high, there could be sharp rallies but overall trend is still negative. December, 2018 low of 2800 will now act a resistance and is a critical level for SPX 500.

As the number of cases in US continue to surge and several states remain under lockdown, the Fed undertook unprecedented measures periods to ward off a credit crunch and pump liquidity into the frozen markets. The unlimited QE program by the Fed coupled with $2.2 trillion package finally passed by the Congress last week resulted in a major sell off in Dollar. On the monetary side, US FED is on track to buy Treasury & MBS assets with weekly totals of around $ 600 + billion. This is apart from other short & medium term facilities to support term repo as well as corporate & investment grade bond buying including in the secondary market via ETF’s. the record surge in jobless claims to 3.28 million has fueled further hopes of stimulus package. With number of covid-19 cases worlding topping 750,000 worldwide, and the US nearing the 150,000 mark, the safe-haven Yen should remain bid against the Dollar.

Gold reclaimed its safe-haven title as it ended the week about 8% higher at $1620 supported by the unprecedented measures taken by the Fed to ward off a credit crunch and pump liquidity into the frozen markets. The unlimited QE program by the Fed coupled with $2 trillion package from the US has certainly aided the liquidity pressure as evidenced by a weaker Dollar. Gold prices should remain supported as the surge in US jobless claims has fueled hopes for more fiscal stimulus from the US. Besides, G20 members have pledged to pump in $5 trillion into the global economy to limit job and income losses. While the volatility is expected to remain high in the short term, interest rates at zero, record deficit spending, and Fed’s QE with no preset limits is perfect environment for bullion in the long run.

BlackRock Taxable Municipal Bond Trust ("BBN" or the "Trust") investment objective is to seek high current income, with a secondary objective of capital appreciation. Under normal market conditions, the Trust invests at least 80% of its managed assets in taxable municipal securities, which include Build America Bonds. The Trust also has the ability to invest up to 20% of its managed assets in securities other than taxable municipal securities. Such other securities include tax-exempt securities, U.S. Treasury securities, obligations of the U.S. Government, its agencies and instrumentalities and corporate bonds issued by issuers that have, in the investment adviser's view, typically been associated with or sold in the municipal market.