Markets were blindsided this week as the coronavirus pandemic became very real for many investors. With the NCAA announcing the cancellation of March Madness, the NBA suspending play, and schools and daycares around the country closing their doors, the gravity of the situation has started to set in for many Americans. The longest bull-market run in market history officially came to an end following Thursday’s nearly 10% sell-off in the S&P 500. Central banks around the world stepped in to help stabilize markets on Friday morning through a variety of measures aimed at boosting financial markets. Treasury Secretary Steven Mnuchin told CNBC on Friday the White House and Congress are nearing a deal on stimulus and the administration is “committed to doing whatever it takes to spark the economy amid the coronavirus pandemic”. We can expect economic activity in many parts of the country to slow, and a recessionary environment is now the “base case” scenario for many economists. The uncertainty of the coronavirus will continue dominating headlines, and we can expect wild market swings to become more of the norm until markets are able to digest the real impacts of the virus on jobs, corporate profits, and economic activity as a whole.
Source: Morningstar Direct, CNBC, WSJ Market Data, GSAM, Bloomberg