Investment Review – March 2020

March 12, 2020 Investment Review

  1. Stocks in February experienced an acceleration in volatility as the spread of COVID-19 widened to include all continents except Antarctica. Overall, the S&P 500 returned -9.3%, and the Dow Jones Industrial Average returned -11%. The Nasdaq Composite fared better, losing -7.5% during the month. Each index corrected over 10% from its recent all-time highs reached mid-February.

  2. Bond prices surged in February as interest rates plunged, the 10 and 30-year note yields hitting all-time lows in anticipation of slower growth, if not outright recession, due to the likely disruptions to economic activity both globally and here in the U.S. The 2-year note, the most sensitive to Federal Reserve monetary policy fell to 0.88%, signally a likely cut in interest rates. The 90-day – 10-year yield curve inverted for the first time this year, signaling a rising possibility of recession.

  3. The stock volatility index or so-called “fear gauge” (VIX) more than doubled, ending the month at its highest level of 40. Gold, after initially rallying 10% to $1,659 per ounce, settled back to end the month essentially flat. Although considered a safe haven asset, some think the yellow metal faded as central banks sold gold to raise liquidity. The U.S. dollar index, or DXY, ended the month up 0.75%, but a level which was down 1.75% from its high of 99.86.

key investment statistics for march 2020

Sources: Bloomberg LLCU.S. Commerce DepartmentBureau of Labor Statistics, Dow Jones Inc., MarketWatch, Standard & PoorsFederal Reserve BankFactSet

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