We hope this finds you and your loved ones safe and healthy.
The continued movement in the markets, paired with all the economic headlines you see daily, can leave you searching for facts to try and make sense out of all the information we see and hear. So, we wanted to provide further insight into the market data that we have available. It’s been about two months since the S&P 500 hit an all-time high, and about one month since it hit a low we have not seen since 2017. This made March the most volatile month in U.S. history and the S&P 500’s 34% drop between February 19 and March 23 the fastest decline from a record bull market to a bear market. Thanks to a massive government stimuli package, combined with some specks of COVID-19 relief on the horizon, the markets have rallied the last few weeks. The S&P 500 is now just 15% below its pre-pandemic high and the Nasdaq 100 is positive (1.1%), as of Friday, April 17.
Furthermore, earnings season kicked off last week giving a glimpse into how the pandemic affected the financials of key corporations during the first quarter, with many companies even stating their expectations for the rest of 2020. The markets showed optimism last week for two potential reasons:
- talk of steps to begin to reopen the economy and
- flattening of the curve of new COVID-19 cases, as seen in the graph below.
While it may take some time for uncertainty to subside, based on the progress above, our firm remains long-term optimistic.
Fear and hope amplify most of the strong market movements we’ve seen, especially given the amount we still don’t know around how to reconcile the impact of the Coronavirus pandemic on the population and economy. Rather than fear or hope, our firm remains disciplined and focused on the long-term investment horizon and your financial goals.
Thank you for your continued trust and confidence in our relationship. We remain available to you and your family however we can help. Most importantly, we hope you and your family stay safe.
The source for data from prior day’s end is the “European CDC – Latest Situation Update Worldwide.” Data for U.S. State and intraday measures is https://www.worldometers.info/coronavirus.
The source for any S&P 500 Index (Daily) Data, will be Yahoo Finance (^GSPC). It will be shown assuming historical dividends are reinvested and in U.S. Dollar terms.
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.