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President's Letters

Written by:
Michael Boardman, President, People's United Advisors

APRIL 28, 2020
Gaining Confidence for the Latter Part of the Year

When I last wrote to you on March 23—which has turned out to be the trough of the market so far—the Dow was at about 18,500, down a breathtaking 37% from its all-time high just five weeks prior. On April 23, the Dow closed at about 23,500, up more than 25% from its March low. Yes, it seems that if you blink these days, chances are that you’re missing something of importance. Have we seen the worst for the markets? In the current environment, anything can happen—but we do think that the latest low will stand. Last week, on our client call, we revisited that discussion, sharing our thoughts on the market, the economy and the recent activity in the oil market.

Pain in the Oil Patch.
Oil prices actually fell into negative territory—and not just by a little. On one bleak day, prices bottomed at -$37/barrel, meaning that (theoretically at least) if you wanted to buy 1,000 barrels, the seller would pay you $37,000 to take the oil off their hands. That anomaly proved very transitory, and oil prices are back in the black—but they’re still under pressure. Bond yields also experienced unusual volatility, though they too appear to have calmed down. And maybe most important, the government passed two enormous relief bills totaling $2.8 trillion.

The Markets: Are We There Yet?
The short answer to the question above is “No.” But a month ago we were looking for a bottoming process, and it appears to be happening as we speak. The Dow’s March 23 low (ditto for the broader S&P 500) is being re-tested, so far successfully. If that holds—despite plenty of volatility along the way—we think the market rebound will continue and strengthen in the second half of the year.

That said, we’d like to see value (bargain-priced) stocks and small-cap stocks participate along with their large-cap growth counterparts. Value stocks have plunged about five times as much as growth so far this year, which isn’t surprising for companies that investors weren’t sure about even before the market plunge. Historically, value and small-cap rebounds from market troughs have been stellar—to the tune of 30% and 40% over short time periods. Will this pattern continue? Once value and small-cap start responding, we’ll have solid confidence in a market recovery.

“U”-Shape More Likely
As for the broader economy, our investment team does see a recovery coming. But because of the extreme damage done to so many sectors and the natural fear among consumers to spend money again in close quarters like a shopping mall or a restaurant, we don’t expect the much-hoped-for “V”-shape recovery: down fast, up fast. Rather, we think we’ll see a slower, phased-in “U” shape. However, the near-term numbers will be ugly. We expect very slow, if not negative, GDP growth for the first quarter of the year, and the current second quarter will be worse. We are more confident than we were last month though, that a recovery will begin, albeit slowly. Won’t Energy Prices Drag on the Economy? Yes they will. The virus has decimated oil consumption, cutting 20 million barrels a day off the 100 million we saw prior to the pandemic. While gasoline prices have plummeted, don’t expect to see Americans in their cars as we were before the pandemic for a while.

While our investment team expects oil prices to remain under pressure, the energy sector is relatively small (though it looms large in the minds of many Americans). The best companies will find creative ways to endure and even succeed in the current hostile environment. That’s what good companies do.

Duress Creates Investment Opportunities Security prices are cheapest when they’re depressed. We’d point specifically to the biotech industry (for obvious reasons) and to tech and tech-related stocks like the FAANGs (Facebook, Apple, Amazon, Netflix, and Google—which trades as its parent company Alphabet). The tech companies have enabled us to conduct business, do our household tasks, and stay in touch with friends and family in an increasingly virtual world. Yields on corporates initially spiked up on investor fears but have begun to come down (meaning their prices have increased) as the Fed and the fiscal stimulus calmed the waters.

Unprecedented Times Call for Patience and Perspective
In closing, I’d remind you of the old saying that “This time it’s different” are the most misleading four words about the markets and the economy—except that this time we think it really is different. Some of our regular daily activities, at work and at home, will probably remain virtual even after the coronavirus is history. And many companies, large and small, will begin operating under new business models with new rules about working with customers, suppliers, and employees.

That’s not a bad thing. It’s always scary when the world changes on us. But the ability to adapt to change has always been the hallmark of success for a company—and for an individual too.

We at People’s United have helped our clients through many changes: We’ve been around for generations, offering wealth and investment management services for more than 80 years. So we’ve seen a lot, and we’ve built up uncommon expertise in a wide variety of financial issues. I encourage you to reach out to our advisors with any questions that you have in this difficult time, and I thank you for the trust you’ve placed in us.

MICHAEL M. BOARDMAN is Executive Vice President, Head of Wealth Management at People’s United Bank. He is responsible for strategic oversight and management of the Bank’s Wealth Management Groups, including People’s United Advisors—the registered investment advisor of People’s United Bank—and Private Banking and Institutional Asset Management.

Boardman brings more than 30 years’ experience to People’s United at large banks and financial institutions. Most recently, he served as EVP, Head of U.S. Wealth Management for HSBC. Prior to that, he served as CEO of Chase Wealth Management, and before that, in similar senior leadership roles at U.S. Bank and Charles Schwab.

Michael is a graduate of Middlebury College and earned his MBA from Columbia University in New York City.

Previous Letters


APRIL 9, 2020
A Brief Summary

Over the last four weeks, I am sure you have been processing an enormous amount of information about Covid-19 and the dramatic impact it is having on our lives and the world around us. Like you, I am trying to separate the signal from the noise. In the financial world, this is a time when interest rates, liquidity and fiscal stimulus are combining to create a new and interesting landscape. On a call we hosted last Friday, John Traynor, our Chief Investment Officer, and the senior leaders of the Investment team talked about the current state of the economy and markets, giving their thoughts about the future for both. I have summed up their thoughts for you as follows:

  • The legislative and monetary actions taken so far have been historic in their breadth and enormity. We are optimistic that these moves will put a floor under the economy and position us for a rebound toward the end of the year.
  • We must prepare ourselves for more bad news on the health and economic fronts as the weeks progress. This will cause continued volatility in the markets.
  • We have been here before in ‘87, ‘08 and on 9/11. We will emerge from this crisis different than when it began. Business models have changed. Our relationships with customers, suppliers and employees have changed. Those businesses that recognize those changes will emerge stronger once this crisis ends.

On behalf of my colleagues at People’s United Advisors, I hope you are staying safe and secure. We look forward to sharing our insights on subsequent conference calls and through our periodic written communications. If you would like to discuss your current situation and any specific wealth or investment concerns, please reach out to one of our advisors.


MARCH 15, 2020
What a Difference a Month Makes

Greetings. I hope this note, which I am penning in mid-March, finds you, your families, and your friends well now in mid-April. While it’s impossible to foretell the future, the changes over the past month have simply been unprecedented in our lifetimes and are worth reflecting upon before turning to the months ahead.

In fact, in February, the Dow stood within reach of 30,000; unemployment remained historically low, as did interest rates, and the economy seemed to be forging ahead. That said, there had been continued rumblings over the duration of the 10+ year bull market, and many people had become defensive even as the Coronavirus (COVID-19) was becoming a daily discussion. (N.B. Our asset-allocation team moved to a neutral equity stance at the end of 2019, while overweighting bonds.) However, no one foresaw what was going to happen to our markets, our country, and our world at that time.

Fast forward to the present time (mid-March), and while there is still much uncertainty, our collective focus has narrowed considerably to the issues at hand as governmental fiscal and monetary intervention is reaching a global high point (the $2 Trillion U.S. economic stimulus program being a case in point). The refrain “We’re in this together” has never felt more true to me.

Given this backdrop, please know that my team and I are working every day to support you and your families and, step by step, trying to bring further focus to the things most important to you. From taking gains, harvesting losses, and using the relatively low valuations in the market to make family gifts and charitable contributions, this is a time to work closely with your Advisor. While we are a bank, we have a heart, and I know that our teams care deeply for you and the communities we serve.

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