Market volatility continued this week, with daily market moves of 3% to 4% – both up and down – becoming routine.
The March 9 week began with an oil price war between Russia and Saudi Arabia. On Monday, the price of oil experienced its largest single day drop since the 1991 Gulf War. Stocks followed suit, with the Dow Jones Industrial Average experiencing its largest single-day point drop.
After nearly falling into bear market territory on Monday, stocks roared back Tuesday as the Trump administration pitched an economic stimulus package that included a payroll tax holiday and potential help for travel-related business. However, the effect was limited. By the end of trading Wednesday, the markets had officially entered a bear market, ending an 11-year bull market run.
Investor concern remains high on a global basis as quarantines were imposed throughout Italy, and coronavirus cases in the U.S. topped 1,000. Policymakers around the world are working to limit the spread of the virus and to mitigate economic damage. In addition to the proposed stimulus plan in the U.S., the Bank of England cut rates by 50 basis points and Italy pledged a new $28 billion stimulus package.
Please be assured that we’re keeping a close eye on the situation as it develops and evolves. If you would like to revisit your plan – or if you have any questions I can address – please do not hesitate to give me a call.
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