Overview: Last week was another roller coaster ride in the markets, as investors digested a number of developments around the monetary and fiscal policy response to the spread of the coronavirus. Passage of a $2 trillion U.S. fiscal stimulus package restored market confidence and helped global equities rally. The S&P 500 closed the week up 10.3%. International stocks were higher as well, as the European Central Bank lifted restrictions on its asset purchase program. Moves by central banks globally have demonstrated a willingness to expand stimulus to stabilize markets. Meanwhile, interest rates hovered near record lows, with the 2-year and 10-year Treasuries closing the week at 0.26% and 0.74% respectively. The U.S. weekly initial jobless claims surged to a record high of 3.3 million.
Looking ahead: Central banks and governments across the world are staging a coordinated effort to provide both fiscal and monetary stimulus to assist through these times. In the U.S., the Federal Reserve uncapped the number of assets it could purchase and widened the scope of eligible securities it can purchase to ensure liquidity continues to flow through financial markets. Long-term investors should consider that since 1928, through 14 recessions and 21 bear markets, equity markets have never failed to regain a prior peak. We believe that this time will be no different. We are in unprecedented times, but markets will rebound, and the rebound will likely be significant.
Sources: Goldman Sachs Asset Management, JP Morgan Asset Management, Bloomberg
This communication is for informational purposes only. It is not intended as investment advice or an offer or solicitation for the purchase or sale of any financial instrument.
Indices are unmanaged, represent past performance, do not incur fees or expenses, and cannot be invested into directly. Past performance is no guarantee of future results. 1585575094191