This Weekly Market Update reviews the top three market headlines: 11-Year Bull Market Ends, Bond Yields Fall to Historic Lows, Oil Prices Dive

Data Points

Top Three Market Headlines

11-Year Bull Market Ends: The longest bull market in history for U.S. stocks came to an end last Wednesday when the Dow Jones Industrial Average closed at 23,553, down 20.3% since February 12, thereby surpassing the 20% threshold (from recent highs) that signifies a bear market. The S&P 500 and NASDAQ indices followed suit the next day, ending at levels that brought their drawdowns from recent highs to 26.9% and 26.8%, respectively. The bull market started March 9, 2009 amid the global financial crisis and had survived numerous scares over the 11 years since, including the European sovereign debt crisis in 2011 and Brexit in 2016, before finally succumbing to recent investor worries stemming from the COVID-19 pandemic and the collapse of oil prices.

Bond Yields Fall to Historic Lows: Investors’ flight to safety amid the turmoil in global financial markets drove U.S. government bond yields to historically low levels early last week. On Monday, March 9, the entire U.S. Treasury yield curve, from 3-month bills to 30-year bonds, fell below 1% for the first time ever, with the yields on the benchmark 10-year and 30-year Treasury bonds settling that day at 0.50% 0.93%, respectively. After touching those lows, however, yields then rebounded during the course of the week, echoing the volatility witnessed across many other financial markets in recent periods; by week’s end, the 10-year Treasury yield had settled at 0.95%, while 30-year finished at 1.55%.

Oil Prices Dive: Brent crude oil, the international oil price benchmark, plunged 23% last week, hitting an intra-week low of $32.50 per barrel, its lowest level in 3 and 1/2 years. The decline came after one of the largest producers of crude oil, Russia, declared it wouldn’t support expanding output cuts previously established by OPEC and other oil-producing nations to support global oil prices. In response, Saudi Arabia cut the price of its oil and declared it would increase production starting in April. The developments left investors fearing that a glut in oil supply will emerge at the same time demand for the energy commodity is expected to decline as the COVID-19 outbreak weighs on global economic growth.  

 

Please note: the quarter-to-date and year-to-date returns for the MSCI EAFE Index in last week’s Weekly Market Update should have read -10.64%, not 10.64%, while the returns for the MSCI Emerging Markets Index for the same periods should have read -9.06%, not 9.06%. We apologize for the errors.

 

As of March 16, 2020 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -12.35% -19.95% -19.95% -8.97%
S&P 500 -8.73% -15.73% -15.73% -1.60%
Russell 2000 -16.44% -27.27% -27.27% -21.05%
MSCI EAFE -18.36% -27.05% -27.05% -18.50%
MSCI Emerging Markets -11.92% -19.91% -19.91% -13.00%
FTSE NAREIT -13.06% -16.51% -19.91% -8.16%
Bloomberg Commodity -7.74% -19.03% -19.03% -18.34%
Barclays U.S. Aggregate -3.17% 2.36% 2.36% 9.46%

WSJ 3/11/2020. WSJ 3/9/2020, WSJ 3/10/2020 Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an SEC Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. Gallagher Fiduciary Advisors, LLC is a single-member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal or tax advice. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your Gallagher Fiduciary Advisors consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.