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One Year Since the COVID Crash: How Far We’ve Come

It’s been one full year since the stock market crash on March 23rd, 2020, and a few months more since the novel coronavirus, COVID-19, was first identified. Little did we know how much the world, our daily habits, and our portfolios, would be changed.

Here, we reflect on the past year through data and visuals that illustrate the extent of COVID-19’s impact on the market and our lives. Here’s how far we’ve come:

 

2019: When the World Was Still Normal

Remember going into the new decade with such high hopes? Even in early 2020, when COVID-19 first reached U.S. shores, the bull market carried on with business as usual. The Dow, NASDAQ, and S&P 500 set record high after record high through late February. Meanwhile, the unemployment rate similarly moved in one direction: lower.

Performance of Dow, Nasdaq, and S&P 500, and Unemployment Rate from 12/31/2018 - 02/14/2020

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March 2020: The Sky Falls

In March alone, US Coronavirus cases per day jumped from six to 26,000. As case numbers rose, the world shut down and markets crashed. The CBOE S&P 500 Volatility Index (VIX) reached an all-time high, even beyond those seen during the 2008 financial crisis, and US investors became considerably more bearish.

Bearish US Investor Sentiment, CBOE S&P 500 VIX Change, and US Coronavirus Cases Per Day from 12/31/2019 to 3/31/2020

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BEACH stocks (Booking, Entertainment, Airlines, Cruise Lines, Hotels & Resorts) lost over half their value in just a matter of days. 

Booking Holdings, Live Nation Entertainment, United Airlines Holdings, Carnival Corp, and Wynn Resorts price changes 12/31/2019 - 3/31/2020

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Only 36 names in the S&P 500 finished positive in the first quarter of 2020. The few safe havens were mostly pandemic-response stocks like Clorox (CLX), Regeneron Pharmaceuticals (REGN), and Domino’s Pizza (DPZ) for what would unknowingly be a lot of movie nights at home to come.

 

Spring 2020: The Quarantine Economy

The world began a coordinated effort to “flatten the curve”. At the end of May, worldwide deaths trended downward, as did both deaths and daily cases in the U.S.

US Coronavirus Cases Per Day, World Coronavirus Cases Per Day, US Coronavirus Deaths Per Day, and World Coronavirus Deaths Per Day 1/23/2020 - 5/31/2020

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U.S. equities significantly bounced off their lows, despite the unemployment rate skyrocketing from 4.4% in March to 13.3% in May. Investors piled into an array of “stay-at-home” stocks, such as Shopify (SHOP), Peloton Interactive (PTON), DocuSign (DOCU), Zoom Video Communications (ZM), Amazon.com (AMZN), and Netflix (NFLX).

Shopify, Peloton Interactive, Docusign, Zoom Video Communications, Amazon.com, Netflix Total Returns 3/31/2020 - 6/1/2020

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Tech stocks boomed as well thanks to “work-from-home” becoming more mainstream. The NASDAQ steadily outperformed the Dow as growth stocks—mostly big tech names—outperformed value.

NVIDIA, Facebook, Apple, SPDR Technology Select (XLK) ETF, Microsoft Price Changes from 3/23/2020 - 6/1/2020

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Summer 2020: The Second Wave

Deaths in both the U.S. and around the world flattened out; however, cases resurged in summer 2020, reaching as many as 77,255 per day through a stunted economic reopening. 

US Coronavirus Cases Per Day, World Coronavirus Cases Per Day, US Coronavirus Deaths Per Day, and World Coronavirus Deaths Per Day 1/23/2020 - 8/31/2020

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Pharmaceutical companies Moderna (MRNA) and Pfizer (PFE) published promising clinical trial data on COVID-19 vaccines, sending their shares up. Crude oil prices went negative in a rare economic twist and took U.S. crude oil stocks down with them.

Moderna, Pfizer Price Changes, US Crude Oil Stocks week-over-week change, and WTI Crude Oil Spot Price 3/23/2020 - 8/31/2020

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With cases on the rise again, we asked advisors if COVID-19 affected their trust in third-party model portfolios. See what they said.

 

Late 2020: The Dark Winter

If March and late summer looked bleak, October through the rest of 2020 was quite dire. Daily cases in the U.S. ramped up to multiple hundreds of thousands through year’s end, and deaths per day rose along with them.

US Coronavirus Cases Per Day, World Coronavirus Cases Per Day, US Coronavirus Deaths Per Day, and World Coronavirus Deaths Per Day 1/23/2020 - 12/31/2020

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Before 2020 was over, the U.S. Treasury issued a second round of stimulus checks to Americans. The combined $450 billion spent by the Treasury on two rounds of stimulus payments helped weaken the U.S. dollar, prompting many to turn to Bitcoin as an alternative storer of currency.

Bitcoin Price, USD/GBP, USD/EUR, USD/CAD exchange rates 2/14/2020 - 12/31/2020

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Also at year’s end, the FDA approved both the Moderna and Pfizer vaccines. Which brings us to…

 

2021: The Vaccination Era

At long last, there was light at the end of the tunnel. Approved COVID-19 vaccines were rolled out in January, and one-tenth of the U.S. population became fully vaccinated within two months. The “Dark Winter” waned as well, as daily cases dropped to end-of-summer levels.

US Coronavirus Cases Per Day, World Coronavirus Cases Per Day, US Coronavirus Full Vaccination Rate, and World Coronavirus Vaccination Rate 1/23/2020 - 3/23/2021

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As vaccines boosted confidence in an economic comeback, investors rotated out of growth and into value. The Dow also overtook the NASDAQ in late Q1 2021.

iShares Russell 1000 Value and Growth ETF Price Change and 30-Day Average Daily Volume Change 12/31/2020 - 3/23/2021

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The Treasury then issued a third round of stimulus checks at a rate of $1,400 per individual in March, though less Americans qualified for the third-time charm. One number investors will be keeping an eye on is the U.S. public debt outstanding, which has increased almost 18% since the first round of payments.

Dow, Nasdaq, S&P 500, US Public Debt Outstanding Level Change 3/31/2020 - 3/23/2020

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Nonetheless, it’s hard to believe all these events transpired in only a year’s time. Despite all the coronavirus cases, economic woes, and global uncertainty, it’s amazing to think how far and fast markets have come since the crash last March.

Even though we’re not totally out of the woods yet, many didn’t think we would have progressed back to normal at this rate. It helps to put these narratives in perspective using visuals and data, and YCharts is here to help you communicate trends to your clients.

While you’re at it, check out our comprehensive list of coronavirus data, and watch how it can be used to navigate uncertainty and make smarter investment decisions for your clients.

 

 

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