March 16 – March 20 Week in review

The markets suffered their worst week since 2008 as the economy slowly shuts down from the coronavirus. The Dow Jones Industrial Average fell 17.3%, the Russell 2000 dropped 16.2%, the S&P 500 was down 15.0% and the Nasdaq Composite lost 12.6%.

No sector was spared in this week's carnage with all 11 S&P 500 sectors losing more than 11%, including a 23.0% plunge in the real estate sector. Confidence was lacking among investors, businesses, and consumers despite additional stimulus efforts taken by central banks given the magnitude of the situation.

Commentary 3.23.20

More and more companies withdrew guidance, suspended dividends, and temporarily closed operations, which led to many Americans without a job. The latter started to show in the weekly initial jobless claims, which increased by 70,000 to 281,000 for the week ending March 14th.

To support the financial system, the Fed slashed the target range for the fed funds rate to 0.00%-0.25%, lowered the discount rate to 0.25%, announced a $700 billion quantitative easing program, increased its daily repo operations, established facilities for commercial paper funding and money market mutual fund liquidity, and coordinated with other central banks to enhance liquidity via standing U.S. dollar liquidity swap line arrangements.

A host of stimulus measures were also taken by other central banks, but investors continued to wait for a massive fiscal response. Congress passed an $8.3 billion relief package that provides unemployment and sick leave benefits, and the FHFA suspended foreclosures and evictions for 60 days for enterprise-backed mortgages. The $1 trillion+ fiscal stimulus package, which includes direct payments to Americans and aid for businesses, continued to be deliberated.

Oil prices tanked 24% one day, then rebounded 23% the next day after President Trump said he will get involved in the price war between Russia and Saudi Arabia at "the appropriate time." The Wall Street Journal reported that Texas was also considering cutting oil production. For the week, WTI crude still declined 24.3% to $23.73 a barrel.

Even safe-haven assets faced selling pressure last week in a move that suggested investors were raising cash, which contributed to the 4.1% surge in the U.S. Dollar Index which closed at 102.74. Gold futures declined 2.1% to $1484.60 an ounce. The 2 year yield declined 14 basis points to 0.37%, and the 10 year yield declined one basis point to 0.94%.

March 23 – March 27 Economic Calendar

  • Monday
  • Chicago Fed National Activity Index
    8:30 AM ET



  • Tuesday
  • Redbook
    8:55 AM ET
  • PMI Composite Flash
    9:45 AM ET
  • New Home Sales
    10:00 AM ET
  • Richmond Fed Manufacturing Index
    10:00 AM ET




  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Durable Goods Orders
    8:30 AM ET
  • FHFA House Price Index
    9:00 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Survey of Business Uncertainty
    11:00 AM ET



  • Thursday
  • GDP
    8:30 AM ET
  • International Trade in Goods
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Corporate Profits
    8:30 AM ET
  • Retail Inventories [Advance]
    8:30 AM ET
  • Wholesale Inventories [Advance]
    8:30 AM ET
  • EIA Natural Gas Report
    10:30 AM ET


  • Kansas City Fed Manufacturing Index
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • Personal Income and Outlays
      8:30 AM ET
    • Consumer Sentiment
      10:00 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET



 


 

 

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This commentary is a matter of opinion and is for informational purposes only. It is not intended as investment advice and does not address or account for individual investor circumstances. Investment decisions should always be made based on the client's specific financial needs, goals and objectives, time horizon and risk tolerance. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.

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