Market Update 26 March: Equities stabilize as Senate stimulus unveiled

• Wednesday saw another broadly positive day for equities with the S&P 500 and Dow Jones up 1.1% and 2.3%, respectively, although Nasdaq ended 0.5% lower.
• Overnight the Senate approved the USD 2 trillion coronavirus stimulus package (representing around 9.5% of US GDP)
• Among the most important economic provisions are:
  • USD 377 billion (1.8% of GDP) small business program that will provide affected businesses with loans that won't need to be repaid if the proceeds are used to pay wages or buy other necessities
  • USD 500 billion (2.4% of GDP) in capital for loans and loan guarantees, including USD 454 billion that the Treasury may use to backstop Fed facilities to provide business credit
  • USD 250 billion (1.2% of GDP) in payments to individuals (USD 1,200 per adult, USD 500 per child)
  • Approx. USD 250 billion (1.2% of GDP) in expanded unemployment insurance that will replace workers' lost wages
  • USD 150 billion (0.7% of GDP) in fiscal state aid, which should mostly offset the effects of COVID-19 on state / local budgets
  • USD 340 billion (1.6% of GDP) in federal spending, of which USD 130 billion directly for hospitals and health care efforts
• The NOK continued to appreciate yesterday, supported by risk-on sentiment and Norges Bank intervention.
• Markets are awaiting the numbers for US Initial Jobless Claims this afternoon which will offer some insight into the effects on the labor markets of the emergency response to the coronavirus.

SKAGEN Funds Summary

• Market volatility continues to provide opportunities.
• As active investors with broad mandates, it gives us an opportunity to identify strong companies that can be trading at significant discounts.