The Markets (as of market close March 13, 2020)
While the hope may have been that it couldn’t get worse, unfortunately, it has. The coronavirus has not only posed a significant health threat to millions of people worldwide, but its impact has been felt economically and in the stock markets, both here and globally. Last Wednesday, the World Health Organization officially designated the coronavirus outbreak a pandemic, having reached more than 100 countries and more than 100,000 reported individual cases. President Trump announced that he intended to suspend travel from certain areas of Europe to the United States for the next 30 days. He also proposed plans for $50 billion in low-interest loans to affected businesses and delaying the April 15 tax-filing deadline. And Congress approved about $8 billion in funding to develop virus treatments and provide financial help to states.
Stock markets reacted negatively to that news, plunging dramatically on Thursday. Not unexpectedly, some individual stocks were hit hardest, including airline and transportation stocks, retail and eatery shares, and energy stocks. The markets recouped some losses midday Thursday following the Federal Reserve’s announced intention to infuse more than $1.5 trillion into short-term funding markets. But the spurt was short-lived as stocks suffered their worst single-day drop since 1987’s Black Monday. Globally, stocks fared no better. STOXX Europe, Japan’s Nikkei 225, and China’s Shanghai Composite Index all suffered losses.
The sell-off continued into Friday, which looked poised to reach bear levels across most indexes. A late rally pushed stocks higher following the president’s declaration of a national emergency last Friday afternoon. Whether this surge will carry over to next week remains to be seen. Nevertheless, each of the benchmark indexes closed last week in the red, led by the small caps of the Russell 2000 and the Global Dow. The Dow fell over 10% despite gaining almost 2,000 points late Friday. The Nasdaq and S&P 500 each managed to keep losses in single digits.
Oil prices continued to plunge last week, closing at $33.34 per barrel by late Friday afternoon, down from the prior week’s price of $41.56. The price of gold (COMEX) also fell last week, closing at $1,532.80 by late Friday afternoon, down from the prior week’s price of $1,674.30. The national average retail regular gasoline price was $2.375 per gallon on March 9, 2020, $0.048 lower than the prior week’s price and $0.096 less than a year ago. Click here for more: Winthroppartners Weekly Update 3-16-2020
Thomas Saunders is the Managing Partner of Winthrop Partners. Prior to founding Winthrop Partners, Tom was Senior Vice President at what is now JP Morgan. His career includes senior and executive roles at Brown Brothers Harriman and First Niagara Bank, a top 25 Bank. Click here to contact Thomas Saunders about your investment and planning requirements.