Market developments and recovery progress for March 30

A perspective from E*TRADE Capital Management, LLC 03/30/20

Below are the most recent market and economic developments:

  • Despite losing some steam on Friday, US stocks had their strongest week since March 2009. The S&P 500® finished last week up 10%, while the Dow Jones Industrial Average gained 13% after notching its largest one-day and three-day rallies since the 1930s.
  • US stocks were higher in early trading Monday, even as investors digested large numbers of new coronavirus cases over the weekend. 
  • Crude oil briefly traded below $20/barrel for the first time since February 2002.
  • President Trump signed the largest relief package in US history,1 which includes $2 trillion in financial aid and loans to help individuals and businesses affected by the coronavirus pandemic. You can learn more about the legislation here.
  • During a task force briefing on March 29, President Trump announced he would extend social distancing guidelines until April 30—a reversal from last week, when the President discussed reopening the economy by Easter.

And here are the most recent updates on our path towards recovery:

  • Congress and White House officials have begun talks for a potential “phase four” stimulus plan. Among the ideas being considered are an extension of benefits included in the package passed on March 27 and additional funds for state and local governments.2
  • A slowdown in new coronavirus cases in hot spots like Seattle and New Rochelle, NY, could indicate strict containment precautions are working. Only 38 new cases were reported in New Rochelle over the past four days,3 while the rate of infection in Seattle appears to have slowed from an average of 2.4 new infections for every confirmed case to 1.4.4
  • South Korea is preparing to soften social-distancing guidelines after April 5, as the rate of infection slows. The country, which experienced one of the first major outbreaks outside of China, took aggressive action in mid-February and is now working on new sustainable “social-prevention measures.”5

Some food for thought:

Last week marked a historic moment in the fight against the virus-driven economic downturn with a signed, sealed, and delivered relief package of epic proportions. But the beginning of a new month will bring new worries, as individual Americans and businesses are faced with impending bills and the psychological burden of another four weeks of social distancing.

Bottom line: In uncertain times, it’s challenging to navigate the here and now while also maintaining a long-term perspective. Just as the markets are forward looking, investors should look to the future and take comfort in knowing the economy and businesses will adapt and evolve, and will continue to produce goods, services, cash flows, and profits. This will be reflected in the market's long-term returns—and the portfolios of investors who maintain a forward mindset.

  1. CNN, “Trump signs historic $2 trillion stimulus after Congress passes it Friday,” 3/27/20, https://www.cnn.com/2020/03/27/politics/coronavirus-stimulus-house-vote/index.html
  2. The Wall Street Journal, “After Three Coronavirus Stimulus Packages, Congress Is Already Prepping Phase Four,” 3/29/20, https://www.wsj.com/articles/after-three-coronavirus-stimulus-packages-congress-is-already-prepping-phase-four-11585483203
  3. The New York Times, “New Rochelle, Once a Coronavirus Hot Spot, May Now Offer Hope,” 3/27/20, https://www.nytimes.com/2020/03/27/nyregion/new-rochelle-coronavirus.html
  4. The New York Times, “Coronavirus Slowdown in Seattle Suggests Restrictions Are Working,” 3/29/20, https://www.nytimes.com/2020/03/29/us/seattle-washington-state-coronavirus-transmission-rate.html
  5. The Wall Street Journal, “As Coronavirus Infections Slow, South Korea Plans for Life After Social Distancing,” 3/27/20, https://www.wsj.com/articles/as-coronavirus-infections-slow-south-korea-plans-for-life-after-social-distancing-11585320356

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