US Equity Markets rebounded sharply last week, as Congress approved a $2 trillion stimulus package and the Federal Reserve continued to boost liquidity in response to the economic shutdown from the coronavirus. The S&P 500 rose 10.3% for the week, reducing losses for the year to 21.3%. The Nasdaq increased 9.1% for the week and is now down 16.4% for the year, while the Russell 2000 (small-cap stocks) rallied 11.7% for the week but remains down 32.2% for the year.
Global equity markets also bounced back last week as governments and central banks across the world take actions to stimulate economic activity. Developed Markets increased 11.7% for the week though remain down 24.6% for the year. Emerging Markets rose 9.9% for the week and is now down 24.4% for the year.
US interest rates dropped notably last week, as the Federal Reserve raised the caps on its bond-buying abilities and established credit facilities to purchase more types of fixed income instruments. Fed Chairman Powell reiterated that the Fed has plenty of ammunition still in its arsenal that may be used to support the economy, if needed. The yield on the US 10-Year Treasury fell to 0.68% from 0.96% the prior week.
Of Interest to Us
Investor sentiment, which is typically a contrarian indicator, has dropped to its lowest level in several years. The American Association of Individual Investors shows that 52.1% of investors are bearish, the highest reading since early 2013 and well above the historical norm of 30.5%. In addition, the Institutional Investor sentiment survey shows more Bears than Bulls for the first time since the market lows in late 2018.
Market Data
for the week ending 3/27/2020
If you have questions about the markets or would like to talk about your investments, please contact me at bfontana@invtrust.com or via phone at 704.940.3544.
Investors Trust Company helps its clients make sound financial decisions by providing strategic advice and asset management services with a high level of personalized attention. If we may help you or your clients with their investment management needs, please contact one of our Relationship Team members at trust@invtrust.com.
