Market Watch Weekly | May 1st, 2020 | May The 4th Be With You.

Erik Dekker - May 01, 2020
What a difference a month makes… Before we dive into the month of April, let’s take a step back and review “March Madness”. The S&P500 closed down 12.51% in March, notching its worst monthly return since October 2008.

What a difference a month makes… Before we dive into the month of April, let’s take a step back and review “March Madness”. The S&P500 closed down 12.51% in March, notching its worst monthly return since October 2008. According to Bespoke Investment, March was the S&P 500′s most volatile month ever as frenetic swings whipsawed the market from steep gains to even steeper losses. The average daily move of the index, in either direction, was a staggering 4.9%. With exception of March 19, each day had an up or down move of more than 1%. For perspective, the average daily change over the past five years has been 0.7%.

 

Fast forward 30 days and the S&P 500 just posted its best monthly gain since January 1987 and third best month since WW II, up 12.7%. The past month is a perfect reminder of why it is important to stay calm and make longer-term decisions during market declines. The S&P 500 has experienced two of its best 10 days since 1928 within the past month, including the ninth-best day (+9.4%) on March 24 – the day after the low point of this market decline. Market swings have not disappeared, but their magnitude has started to narrow with the average daily move over the past month at roughly 2.5%.

 

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