Gold has done quite well so far in 2020, up more than 12% year to date versus the S&P 500 Index which is down about 10%. We started to warm to the yellow metal late last year and continue to think it can serve as a potential hedge in a well-diversified portfolio for suitable investors.

“From COVID-19, to massive monetary stimulus, to historically lower yields, to potentially negative fed funds rates down the road, there are many reasons to think gold could continue its recent strength,” explained LPL Financial Senior Market Strategist Ryan Detrick.

As shown in the LPL Chart of the Day, gold based for

Like most major segments of the bond market outside Treasuries, mortgage-backed securities (MBS) experienced increased market stress as global COVID-19 containment efforts accelerated. And, like most major segments of the bond market, market stress declined after the Federal Reserve (Fed) stepped in, which included renewed MBS purchases.

Despite the market volatility, MBS were relatively resilient. As shown in the LPL Chart of the Day, while MBS spreads did widen the most since the financial crisis in March, they have returned to close to their long-term average and were not nearly as volatile as corporate spreads.

Investment Takeaways

As May began, investors continued to try to reconcile the strong rebound in stocks with the devastating economic damage from COVID-19. Given the strength of the rally since the March lows, in our view, the risk of a correction in the short term has risen, supported by our Road to Recovery Playbook. Our intermediate - to long-term outlook for stocks remains positive.

• Our equities recommendation remains overweight. Optimism around the re-opening of the US and global economies, coupled with massive fiscal and monetary stimulus, suggest a full retest of the March 23 lows may be unlikely. At

Stocks have had a historic run amid increasingly negative headlines. Historically, stocks have tended to lead the economy, and while a second-half rebound may be likely, some equity weakness over the coming months is also possible. The historically worst six months of the year have officially started, and combined with technical warnings, that suggests stocks may take a well-deserved break soon.

Technical Warning Signs Grow

In April, the S&P 500 Index had a historic rally off the March 23 lows, gaining more than 31% through April 29. The strength of the move, as well as internal data, suggests that a full retest of the M