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.
It’s been a week of positive returns in domestic equity markets, and that feels good to write. The S&P 500 return over the week was 3.27%. This comes on the heels of the potential passage of stimulatory fiscal and monetary actions.
Markets continue to sell-off as the western world shuts down business to minimize the spread of COVID-19 (coronavirus). The S&P 500 was down 12.5% on the week and held up better than other global indices.
The Federal Reserve (Fed), along with six central banks from around the globe, launched the most dramatic monetary measures to boost America’s economy in its entire 105-year history. Pulling from its 2008 playbook the Fed has implemented plans at an aggressive pace to relieve key stress points in financial markets.
Global equities sold off sharply on the week as COVID-19 (coronavirus) headlines accelerated and became more dire. The S&P 500 was down 12.4% on the week while small caps fell more than 17%.
Over the weekend COVID-19 (coronavirus) became significantly more widespread on a global basis. Italy quarantined several large cities and the state of preparedness in the United States continues to face scrutiny.
News started rolling in this past Sunday of Aramco, the Saudi Arabian state oil company, cutting oil prices. On top of that, it pledged to increase production of oil. This will certainly have a significant impact on both commodity and financial markets.
It has been a see-saw week with equity markets seeing both highs and lows. The coronavirus and reactions to the virus continue to significantly impact performance of investment markets. Equity markets took a big dip last Thursday, after global increases in the number of coronavirus cases was reported.
Yesterday’s Insight Extra featured commentary surrounding the coronavirus. Therefore, we won’t dive too deep on that topic again today. We will, however, discuss the impact on S&P 500 one-week performance.
Coronavirus: Economic and Financial Market Impacts
As the number of reported cases increases across a growing number of countries, concern about the impact of the coronavirus on the global economy and financial markets is being elevated.