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John Hancock: Weekly Market Recap Week Ended April 3rd

April 7, 2020

 

Bearish quarter

The first three months of 2020 marked the worst first quarter ever for the S&P 500 and the Dow, although there have been steeper declines counting data from three-month periods other than first quarters. The S&P 500 dropped about 20%, the Dow tumbled 23%, and the NASDAQ sustained a relatively modest 14% decline.

 

Relative calm

An index that measures investors’ expectations of stock market volatility over the next 30 days fell to around 47, down from more than 65 at the end of the previous week. While the Cboe Volatility Index remained relatively high from a historical perspective, the index is down from a peak of more than 84 reached on March 18.

 

Negative earnings

With quarterly earnings season about to get under way, 2020 is expected to bring the biggest year-over-year decrease in  earnings since 2008’s 25.4% drop. As of March 30, FactSet projected that earnings for companies in the S&P 500 will decrease by 1.2% this year. The research firm expects a 5.2% first-quarter decline followed by a 10.0% drop in the second quarter.

 

Relief rally stalls

The stock market’s positive momentum from the previous week’s double-digit gains petered out, and the major U.S. indexes fell around 2% to 3%. Stocks had a hard time gaining traction as coronavirus cases continued to surge in the United States and most other countries, and the economic impact widened.

 

Source: https://wmr.jhinvestments.com/

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