In order to feel confident that the stock market fundamentally has found a bottom, three criteria must be met:

  1. The viral spread in the United States must begin to slow, so that the ultimate economic impact of the virus and containment efforts can be understood.
  2. There must be evidence that extraordinary measures taken by the Federal Reserve and Congress to support the U.S. economy are enough.
  3. Investor sentiment and positioning must bottom out.

In addition, when nearly 50 U.S. corporations have suspended existing share repurchase authorizations in recent weeks, representing $190 billion in buybacks, that alone is a massive headwind in the equity markets. The buybacks have represented the single largest source of U.S. equity demand in each of the last several years. So, higher volatility and lower equity valuations are among the likely consequences of reduced buybacks.