There was a significant contraction in GDP in the first quarter of 2020. Initial numbers show a contraction of 4.8%. We have not seen such a sharp drop since the financial crisis.
Equities had two consecutive down days but bounced back to finish the week in the green. Small caps led the way with gains of 1.5% while foreign equities lagged. Yields moved lower with the five-year yield setting an all-time low.
March and first quarter 2020 data continue to come in. The expectation has been for reported numbers to be relatively bad. In some cases, the numbers are worse than expected.
Equities were up sharply on the week as the S&P 500 gained 11.4%. Small caps were also up 11%, while beaten up industries had some big gap ups in prices.
With the COVID-19 virus continuing to expand its presence throughout the United States we have seen responses both from monetary policy and fiscal policy.
On March 15 the Federal Reserve (Fed) slashed the Fed Funds rate to a range of 0.00% to 0.25%, the lowest level since December 2015.
Investment markets continue to react to the COVID-19 pandemic. Wide daily swings in performance have become the norm over the last few weeks. The $2 trillion virus relief package, the CARES Act, was approved by the Senate and the House, and President Trump has signed it.