Market Update from the Global Asset Allocation team – April 2020
The month of March was nothing short of unprecedented. Financial markets were roiled against the backdrop of the escalating COVID-19 pandemic and the dreadful economic fallout from the countermeasures to contain it. Investors are weighing the progression of the outbreak and the ramifications for global growth against the efficacy of the monetary and fiscal response in restoring financial market stability and stemming the economic hardship. As the breadth and depth of the outbreak and its economic toll remain unknown at this time, sentiment is almost certain to be fragile until the virus has been contained.
Fear gripped the panic-stricken marketplace in an unparalleled month, with global equity benchmarks down sharply in the wave of indiscriminate selling. While assertive action from central banks and governments indeed alleviated some of the pressure, the mid-month revival in risk appetite proved fleeting as coronavirus cases continued to mount globally. The carnage was felt broadly across the world in the exodus to safe haven assets. The S&P 500 capped a horrific month, while the S&P/TSX led the decline amid calamitous weakness in the battered energy sector. Looking abroad, European and Japanese equities also joined the monthly rout, while emerging market stocks have shed close to $5 trillion in value since the beginning of the year.