Almost everything was red as the first quarter was one for the record books
The first quarter of 2020 is over and it was ugly, as just about all asset classes, styles and global markets dropped. In the U.S., investors saw the Dow Jones Industrial Average and the S&P 500 both lose more than 20% for the quarter. It was the worst first quarter for the DJIA and the S&P 500 in history.
It is surreal to even think about, but the speed with which markets dropped was stunning, especially since mid-way through the quarter, the DJIA was within a whisper of cresting 30,000 and the S&P 500 and NASDAQ hit highs on February 19th.
Global markets had a lot to digest in the first quarter, but there was a single negative theme influencing the steep drops – the coronavirus.
Asset Class & Style Returns
The negative numbers during the first quarter were not confined to the U.S., however, as global markets were down as the Federal Reserve and other global central banks feverishly cut rates to contain the global economic slowdown.
The first quarter of 2020 was difficult for almost all investors, regardless of asset class and style. The first quarter saw everything painted red as there was a huge change in performance for virtually every asset class, except maybe within segments of the bond market.
Surprisingly, Growth outperformed Value and unsurprisingly large-caps outperformed the smallercap names. Commodities, other than gold, fell sharply during the quarter as well.
World Stock Market Returns
Not surprisingly, every major market around the world faced the COVID-19 headwinds during the quarter.
Fixed-Income & Sector Returns
The first quarter was marked by global central banks easing rates and throwing virtually all their monetary power at trying to soften the blow to global growth.
What Will the Rest of 2020 Bring?
Some are predicting a continued softening of markets around the world as the speed of the slowdown in global growth will increase. Others are suggesting that the easing of monetary policies and a “flattening of the coronavirus curve” will help markets turn around.
But one thing we know for sure is this: Past performance is no guarantee of future results.