The Markets (as of market close April 17, 2020)
Last weekend, Russia, Saudi Arabia, and other major oil-producing countries agreed to slash production as oil prices had fallen about 50% from their January peak. Lack of demand, primarily due to COVID-19, has sent oil prices tumbling. The stock market started out slowly on Monday but picked up some steam to pare losses. Of the major benchmark indexes listed here, only the Nasdaq closed the day up. Investors seemed to worry about what the pandemic would do to corporate earnings and shunned stocks for other investments, such as gold, which rose to its highest price in more than seven years.
Stocks rose sharply last Tuesday as each of the benchmark indexes listed here posted gains of between 1.97% (Global Dow) and 3.95% (Nasdaq). Investors had their hopes buoyed by growing optimism that the peak of the pandemic has been reached and a gradual reopening of the economy is not too far away.
Gains from earlier in the week were given back on Wednesday. Investors were hit with the harsh reality of the impact of COVID-19 on businesses as reflected in sagging corporate earnings. Energy companies and banks reported significant declines in earnings. And crude oil continued to fall, plunging below $19.00 per barrel by the end of the day.
Despite some rather sour economic news, Thursday saw investors generally stay the course as the Dow, S&P 500, and Nasdaq recorded gains by the close of trading. But strong economic reports did not drive the market. In fact, the latest report from the Department of Labor revealed more than 5 million new claims for unemployment insurance, bringing the 4-week total to over 22 million. Some large financial institutions reported steep drops in quarterly earnings, home construction plummeted, and retail sales sank.
Stocks closed higher Friday to finish in the black for the second week in a row. Word of a possible treatment for COVID-19, coupled with President Trump's three-phase process for restarting the economy, gave investors the fortitude to stick with stocks. Each of the benchmark indexes listed here closed the week comfortably ahead, except for the small caps of the Russell 2000. The tech-heavy Nasdaq posted solid gains and is nearing its year-end closing value.
Crude oil prices continued to tumble last week, closing at $18.34 per barrel by late Friday afternoon, down from the prior week's price of $23.19. The price of gold (COMEX), which had been soaring, receded last week, closing at $1,694.50 by late Friday afternoon, down from the prior week's price of $1,715.40. The national average retail regular gasoline price was $1.853 per gallon on April 13, 2020, $0.071 lower than the prior week's price and $0.975 less than a year ago.
Conventional wisdom says that what goes up must come down. But even if you view market volatility as a normal occurrence, it can be tough to handle when your money is at stake. Though there's no foolproof way to handle the ups and downs of the stock market, the following common-sense tips can help.
As of February 26, 2020, the death toll from COVID-19 — the official name of the coronavirus first reported in Wuhan, China — passed 2,700, while the number of confirmed cases exceeded 80,000. Almost all were in China, most of them in Wuhan and the surrounding Hubei province. But more than 2,500 cases, including 46 deaths, had been reported in almost 40 other countries. A surge of cases and deaths in South Korea, Italy, and Iran caused new concern that the virus may be difficult to contain.1
The Markets (as of market close February 7, 2020)
Stocks rebounded and long-term bond yields rose last week amid reports of China's plans to cut tariffs on some American imports. The S&P 500, Dow, and Nasdaq reached all-time highs during the week, and global stocks soared. Also helping push stocks higher was a round of favorable fourth-quarter corporate earnings figures and a strong labor report. Investors seemed intent on locking in gains by last week's end as stocks fell somewhat. Nevertheless, each of the benchmark indexes listed here posted solid gains, led by the Nasdaq, which gained more than 4.0%. The large caps of both the Dow and S&P 500 advanced by 3.0% and 3.17%, respectively. The small caps of the Russell 2000, which had been reeling for the past several weeks, climbed 2.65%. Year-to-date, the Nasdaq is more than 6.0% ahead of its 2019 closing value. Only the Russell 2000 is slightly behind last year's mark.
Oil prices dropped again last week, closing at $50.47 per barrel by late Friday afternoon, down from the prior week's price of $51.61. The price of gold (COMEX) plunged last week, closing at $1,573.90 by late Friday afternoon, down from the prior week's price of $1,592.70. The national average retail regular gasoline price was $2.455 per gallon on February 1, 2020, $0.051 lower than the prior week's price but $0.201 more than a year ago.
The Markets (as of market close January 31, 2020)
Investors continue to be rattled by the growing concern over the spread of the coronavirus, pulling money from stocks for the second week in a row. Each of the benchmark indexes listed here fell, led by the small caps of the Russell 2000, which lost close to 3.0% for the week. The Dow closed the week down more than 600 points while the S&P 500 dropped by more than 2.0%. The Global Dow also gave back almost 3.0% in value by last week's end. Only the Nasdaq lost less than 2.0% — but not by much, closing the week down by 1.76%. As stock values plummeted, long-term bond prices soared, pushing yields significantly lower.
Oil prices dropped again last week, closing at $51.61 per barrel by late Friday afternoon, down from the prior week's price of $54.21. The price of gold (COMEX) surged higher last week, closing at $1,592.70 by late Friday afternoon, up from the prior week's price of $1,570.70. The national average retail regular gasoline price was $2.506 per gallon on January 27, 2020, $0.031 lower than the prior week's price but $0.250 more than a year ago.
The Markets (as of market close January 31, 2020)
January was full of ups and downs as investors rode a wave of uncertainty. The month began with many of the benchmark indexes listed here losing value (except for the Nasdaq) only to surge ahead during the middle of the month. However, fears that a widespread outbreak of the coronavirus would impact global economic growth pushed investors away from stocks, which lost significant value by the end of the month.
By the close of trading on the last day of January, only the tech-heavy Nasdaq gained value, as each of the remaining benchmark indexes listed here fell, led by the small caps of the Russell 2000, which plummeted by more than 3.25%. The Global Dow dropped 2.75%, followed by the Dow and the S&P 500. Unfortunately, the momentum enjoyed in December didn't carry over to January for stock investors.
By the close of trading on January 31, the price of crude oil (WTI) was $51.61 per barrel, well below the December 31 price of $61.21 per barrel. The national average retail regular gasoline price was $2.506 per gallon on January 27, down from the December 30 selling price of $2.571 but $0.250 more than a year ago. The price of gold rose by the end of January, climbing to $1,592.70 by close of business on the 31st, up from its $1,520.00 price at the end of December.
Sequence risk, (sequence-of-returns risk) is defined as the risk of receiving lower or negative returns early in a period when withdrawals are made from an individual's underlying investments. These negative returns combined with withdrawals can seriously impact how long a retiree is able to stretch their money. It is important to understand these risks as it can help with important decisions such as when to retire, or if it is a good idea to keep working for a few years into retirement to decrease the chance of money running out before retirement has ended.