Charts of the Week

Capital Markets Review (As of 3/26/2019)

Chart of the Week for March 27, 2020 - April 2, 2020

Capital Market returns were negatively impacted by the spread of the coronavirus in February and March 2020.

Capital markets returns have been hit hard by the coronavirus pandemic from mid-February to March 26, 2020. Only U.S. Bonds (2.29%) have been able to post positive returns for the 3-month period ended March 26, 2020. Returns have also been generally negative over the 1-year period, but remain primarily positive over the 5- and 10-year periods.

As concerns about the global virus spread over the last three months, equity market returns plummeted, with U.S. Small-Cap Stocks (-29.37%) faring the worst of the asset classes shown. As the U.S. Congress worked toward the approval of a recovery package, some equity losses were recovered this week, including the largest one-day gain ever in the Dow Jones Industrial Index on Tuesday, March 24, 2020. U.S. Bonds returns have been slightly positive due to Federal Reserve rate cuts and investors moving into bonds for their relative safety factor, causing bond prices to rise while yields fell. U.S. High Yield Bonds (-15.27%) have been hurt by concerns about the companies in the energy sector, which make up a large part of high yield holdings and by general concerns over the economy. Both Developed Market Stocks (-22.71%) and Emerging Market Stocks (-23.10%) have performed similarly to domestic stocks as the virus has spread across the globe.

No one can predict short-term market movements. Please focus on what is in your control and invest with your goals in mind.

In the chart above:

  • U.S. Bonds are represented by the Bloomberg Barclays U.S. Aggregate Bond Index.
  • U.S. High Yield Bonds are represented by the Bloomberg Barclays U.S. Corporate High Yield Index.
  • U.S. Large-Cap Stocks are represented by the S&P 500 Index.
  • U.S. Small-Cap Stocks are represented by the Russell 2000 Index.
  • International Developed Market Stocks are represented by the MSCI EAFE (Net) Index.
  • Emerging Market Stocks are represented by the MSCI Emerging Markets (Net) Index.

© Copyright 2019 ICMA Retirement Corporation, All Rights Reserved. This information is intended for educational purposes only and is not to be construed as investment advice or a solicitation to buy or sell securities. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed here. Past performance is not necessarily indicative of future performance.

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