John Hancock: Weekly Market Recap Week Ended March 20th

High anxiety

It was another volatile stretch for stocks, as the S&P 500 tumbled 12.0% on Monday, then gained 6.0% on Tuesday, fell 5.2% on Wednesday, and rose 0.5% on Thursday—the index’s smallest move in nine trading days. On Friday, the index fell 4.3%, and the Cboe Volatility Index ended 14% above its closing level of the previous week.

Bear roars again

Hopes for a rebound rally amid the bear market that began the prior week were dashed, as the three major U.S. indexes posted losses ranging from nearly 13% to 17%. The declines came amid growing expectations that the COVID-19 outbreak will cause major damage to the economy, despite monetary and stimulus interventions.

Activist Fed

On the heels of an interest-rate cut that reduced the benchmark U.S. rate to near 0.00%, the U.S. Federal Reserve on Friday extended its asset purchase program into short-term municipal bonds, expanding on earlier moves targeting Treasury bonds and mortgage-backed securities. The broader initiative is aimed at bolstering liquidity and stabilizing credit markets.

Stimulus rescue

Congress and the White House stepped up efforts to launch stimulus programs potentially exceeding $1 trillion to stem economic damage from the COVID-19 outbreak. Among the measures under consideration were monthly cash payments to U.S. households, loans extended to airlines and other hard-hit industries, and the creation of a $300 billion relief program aimed at limiting small business layoffs.

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