2020 has been an interesting year for the market. It has given us both the fastest bear market in history and, only a short time later, the largest 50-day return in the history of the S&P 500. Just as our confidence began to grow, the market made a 6% drop in a single day. Then on June 15, the S&P 500 opened down 2.5% only to finish the day up 0.83%. Things are moving at a rapid pace, which makes it difficult to reconcile exactly what’s going on in the markets.
As market volatility continues, we’re seeing individuals, businesses, investors, and government agencies trying to respond in a way they deem appropriate:
In response to news that COVID-19 infections are on the rise in several states, investors sold in droves for fears that we’d see a second wave of shutdowns or sustained economic suppression. Experts don’t see another shutdown, but the fear that people would stop going out is still very real.
On Monday June 15, the Fed announced that it would begin buying individual corporate bonds to “support market liquidity and the availability of credit for large employers.”
People are shopping for homes and mortgages at record rates despite the ongoing pandemic. At the same time, people are bracing for a potential deluge of personal bankruptcies.
At this point, there are no consistent signals that reveal additional short-term market growth or short-term drops. Even historically, the markets don’t behave in similar manners from recession to recession. The only conclusion we can draw from historical analysis is that with enough time, markets tend to rise.
In times like this, it’s important to remember your long-term goals, have a comprehensive financial plan and remain consistent with your financial approach. As advisors, our priority is to answer your questions, help you stay calm and keep you on track for long-term financial success. We’ll weather this wild ride just as we’ve done others: together. As always, if you have questions or concerns, we’re just a phone call away.
Blog by Andrew Gaskill, Financial Services Manager.
Sources:
https://www.cnbc.com/2020/06/14/stock-market-futures-open-to-close-news.html
https://www.cnbc.com/2020/06/15/coronavirus-us-doctor-says-the-second-wave-has-begun.html
https://finance.yahoo.com/news/fed-to-expand-purchases-of-corporate-bonds-in-secondary-market-180806282.html
https://finance.yahoo.com/news/housing-hot-economy-deep-freeze-100033358.html
https://www.americanbanker.com/opinion/the-calm-before-the-storm-of-bankruptcies
https://awealthofcommonsense.com/2020/06/why-the-market-is-so-confused-right-now/
Category: Financial Service Team, Market Matters
