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Financial Health
June 4, 2020

Market volatility update from Wells Fargo Investment Institute

June 4, 2020: “Even though people are still losing jobs and we think the economy is still contracting, we think that contraction is getting less and less all the time and the market is looking past that into recovery by the end of this year,” said Paul Christopher, head of Global Market Strategy for Wells Fargo Investment Institute.

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How do you see the recovery evolving?

It’s going to take a while to really get the economy back humming and accelerating where it was pre-COVID levels. During a market update from May 28, 2020, Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management, discussed his view of the economic recovery, which he believes will occur in the three phases.

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What are your thoughts on cash?

Use cash as a tool, not as a shield. Paul Christopher, head of global market strategy for Wells Fargo Investment Institute, explained how investors should take cash from profits to reinvest in favorable sectors during a market update from April 20, 2020.

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Do you believe this is the time to reinvest in the market?

We still think there’s opportunity in some of the places we like. During a market update from May 28, 2020, Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management, discussed strategies for investors given the current U.S. economic challenges.

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Does all this government spending concern you?

Stimulus and bailouts from the government could raise the U.S. budget deficit to levels the country hasn’t faced since World War II. Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management, discussed the concern over the mounting national debt during a daily market update from April 15, 2020.

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Which U.S. region do you believe is best positioned to recover quickly?

U.S. regions best positioned to recover quickly depend on a variety of factors including infection rate, the state’s response, and how well residents obey new protocols. During a market update from April 17, 2020, Paul Christopher, head of global market strategy for Wells Fargo Investment Institute, outlined some of the many variables that will likely determine how well different U.S. regions recover from the recession sparked by the coronavirus pandemic.

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In your opinion, what has to happen for the oil market to find its bottom?

The next step is oil producers in the world will stop producing. During a market update from April 22, 2020, John LaForge, head of real asset strategy for Wells Fargo Investment Institute, outlined his opinion of how the volatility with oil markets going negative will play out toward recovery.

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As some states reopen, what does this say about reopening the economy?

The partial reopen is going to be hard for a number of reasons. Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management, discussed the impact of some states reopening during this market update from May 4, 2020.

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In your opinion, are supply chain problems — particularly for food — going to have an effect on the market?

They’re real world challenges more so than Wall Street challenges at this point. Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management, discussed the impact of some food supply problems on the economic recovery during this market update from May 4, 2020.

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Which sectors do you believe will benefit from the reopening fastest?

The industries that shut down last may actually benefit from reopening first. Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management, discussed the benefits of various industries reopening quickly during this market update from May 4, 2020.

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What is the market looking at in first quarter earnings reports?

What companies are doing about their labor and payroll, share buyback programs, dividend, and capital spending is of more interest to markets than the actual earnings they’re releasing in quarterly reports. Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management, discusses in this daily market update from April 15.

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