If I had predicted in early April that just three months later, stocks would have rebounded and recouped most of their losses, you would have laughed at me. Yet, here we are. During the second quarter, there was a complete turnaround in sentiment, reflecting rising optimism for a vaccine for the COVID-19 virus and a nascent economic recovery.
This week, the global financial markets got sick as a result of the coronavirus. Major U.S. stock indexes have declined about 8% over the past week while international stocks have fallen about 6% (2/18-2/26/2020). Hardest hit were stocks of companies that are related to travel or those that rely on components that are manufactured in Asia, such as technology companies and automotive manufacturers, as well as some retailers.
For many months, the recurring theme in the news has been the economy: when will we experience a recession or bear market and how bad will the downturn be? Unfortunately, the economic commentary has, more than ever it seems, become infused with politics. The political noise makes it hard to maintain a clear-eyed, objective view of where we are economically.