Daily Capital

What Moved the Markets in April?

What Moved the Markets?

April experienced spiking coronavirus infection and mortality counts as well as unprecedented job loss. It was also the best month for U.S. stocks in over thirty years, providing a strong reminder that investing in stocks is related to but very different than investing in countries or economies. Bonds gained modestly as the Fed promised to remain accommodative for as long as it takes.

What Caused the Market Rally in April?

Other than a reversal of some of the panicked selling late in March, it isn’t entirely clear what drove the market rally. There was likely demand from rebalancing of pension funds and other institutional accounts, but that only tells part of the story. Stock prices seemed to benefit from increasing knowledge about the virus, even if the news wasn’t all favorable. It remains frustrating how much is still unknown, but we now know many more people have been infected than have been reported and also have a better sense of mortality rates.

The Tool To Beat

Economies Slowly Begin to Reopen

As May gets started, the world is shifting focus toward how to reopen economies. There are many approaches being utilized, each with unique risks and benefits. Broadly speaking, it seems to us that there is increasing impatience with shutdowns, and it appears it would require very bad outcomes to reverse the trend toward reopening businesses and schools. The speed at which jobs are recreated and the degree to which consumers return to previous spending habits will play a large role in determining if gains in April can be sustained.

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The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Craig Birk, CFP®
Craig Birk leads the Personal Capital Advisors Investment Committee and serves as Chief Investment Officer. His focus is translating improvements in technology into better financial lives. Craig has been widely quoted in the Wall Street Journal, Bloomberg, CNN Money, the Washington Post and elsewhere. Prior to Personal Capital Advisors, he was a leader within the portfolio management team at Fisher Investments, helping assets under management grow from $1.5 billion to over $40 billion. Craig graduated from the University of California at San Diego and has earned the Certified Financial Planner® designation.
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