Financial Summary during covid-19
The year 2020 will undoubtedly go down in history, mainly because of the arrival of covid-19 to society. In financial terms, it is a historic year that will surely serve as a case study for future generations. The impact of Covid-19 on the financial markets has been very important as we have witnessed unique events.
- FASTEST BEAR MARKET IN HISTORY: The S&P 500 declined 34% in just 33 days as the coronavirus pandemic triggered a massive sell-off.
- In a 26-day span from February 24 to March 30, there were an unprecedented 19 daily movements of 3% or more.
- BULL MARKET The speed of the bear market recovery was also historic. The S&P 500's gains since the low point on March 23 have been the largest over a 103-day period in 87 years, according to a Reuters report citing Refinitiv data.
- 52% increase from the March 23 low on August 19.
Recovery analysis
It is important to analyze the context in which the recovery has taken place:
On the one hand, the technology and consumer sectors have increased by 30TP3T and 26% respectively. On the other hand, the financial and energy sector has fallen by 20 and 51%.
There is no doubt that we are living in times of very high valuations; as an example, the technology sector trades at a premium of 69% higher than the 10-year average.
Fiscal stimulus of more than $2 trillion ($2,200 billion) to try to contain the economic impact of the covid-19 pandemic. The stimulus plan, which represents about 10% of the country's gross domestic product, is triple that implemented in 2009 after the outbreak of the financial crisis, which amounted to $700 billion.
