US Equity Markets rallied sharply in a holiday-shortened week last week, as hopes increased that the peak of the coronavirus outbreak is imminent and the Federal Reserve launched more stimulus measures. As a result, the S&P 500 rose 12.1% for the week and is now up over 27% from the lows hit in late March. For the year, the S&P 500 is still down 13.7%. The Nasdaq increased 10.6% for the week to reduce its losses for the year to 9.1%, while the Russell 2000 (small-cap stocks) posted its best week ever, up 18.5%, though it remains down 25.3% for the year.
Global equity rose as well last week, though gains were more subdued than US markets as oil prices once again retreated. Developed Markets increased 8.2% for the week, as European shares outpaced Asian equities. For the year, Developed Markets are now down 21.3%. Emerging Markets under-performed last week due in part to a 21.5% decline in oil prices, but still rose 6.7% for the week. For the year, Emerging Markets are down 20.4%.
The Federal Reserve further calmed fixed income markets last week with the announcement of another $2.3 trillion in emergency lending capacity to businesses and municipalities including a willingness to purchase high yield bonds. This caused yields on corporate and muni bonds to decline for the week. The yield on the US 10-Year Treasury rose to 0.73% from 0.60% the prior week.
Of Interest to Us
Global central banks and governments continue to rapidly expand their economic stimulus efforts. Based on data that we have seen, it appears that announced global stimulus efforts approximate roughly 17% of global economic activity. While near-term economic data will likely be disastrous, this provides hope for an economic pick-up once we get through the current crisis.
for the week ending 4/10/2020
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