The world looks quite a bit different than it did at the beginning of last year, and we hope that we are on the verge of entering into a brighter period. Successful vaccines should lead to the end of social distancing and a return to normalcy.

US Equity Markets in Q1: The S&P 500 increased by +6.2% in the first quarter. The market reached another new all-time high on March 26th when the S&P closed at 3,975. After declining by nearly -34% during the pandemic selloff last year (2/19/20 to 3/23/20), the S&P 500 is up by over +80% from the low.

Our system generated multiple day trading alerts this quarter.

Global equities gained in Q4 as a number of vaccine breakthroughs fostered hopes of a return to economic normality. Government bond performance was mixed, with US yields rising (meaning prices fell). Corporate bonds gained ground. Commodities gained on vaccine news and a weaker US dollar.

US equities gained over the quarter, with November especially strong due to the vaccine news. The developments eclipsed Joe Biden’s win in the US presidential election, as well as a $900 billion stimulus package announced in late December. The Federal Reserve nonetheless reinforced its supportive message, stating it will continue with current levels of quantitative easing. Economically sensitive sectors made the strongest gains, with more defensive sectors making more modest progress.

After a devastating 1st quarter for stocks and risk assets, followed by a 2nd quarter recovery on the back of heavy monetary and fiscal stimulus, it had already been a rather wild ride for the first half of 2020. The 3rd quarter brought continued recovery at a more moderate pace, as most major indexes posted gains for the quarter.

In the U.S., the S&P 500 index gained 8.93% for the quarter. Large tech stocks drove the S&P 500 movements, surging through August before selling off in September. The VIX, a widely-used stock volatility gauge, was at extreme levels around 4x its long-term average at the onset of the Covid-19 stock selloff in March & April. It has gradually trended downward through the 2nd and 3rd quarters, but still ended Q3 about 30% higher than its long-term average.

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At a Glance: The first half of 2020 was a tale of two markets. 1Q20 culminated in the fastest peak to bear market in S&P 500 history, as volatility spiked to unprecedented levels and the coronavirus pandemic spread like wildfire. 2Q20, however, proved the best quarter in over twenty years. Aggressive stimulus & policy, vaccine/therapeutics optimism, and a fasterthan-expected bottoming/rebound in some economic data contributed to the strong performance. Growth shares outpaced Value, while Technology, Consumer Discretionary, and Energy fared best among sectors.

Despite the strong stock market performance, the state of the economy remains mixed at best. Unemployment has been in the double digits (though declining) for three straight months, and the economy shed roughly ~13 million jobs over Q2. Unemployment insurance claims have flattened out, but at a concerning level. Still, several data points indicate a more V-shaped recovery. Manufacturing and service PMI data have rebounded strongly, while the housing market has remained shockingly resilient. All eyes remain on Washington, as an anticipated fifth coronavirus stimulus bill will be key to the continued recovery, particularly given the dire employment situation.

Full list of Day Trading Alerts produced by our system in Q2 2020:

You can see the charts for all day trading alerts below, but first, take look at the overall market data!

The Dow and S&P 500 had their worst first-quarter performances ever, losing 23.2 and 20%, respectively. The Dow also had its worst overall quarter since 1987 while the S&P 500 had its biggest quarterly loss since 2008.
Wall Street also posted sharp losses for the month. The Dow and S&P 500 fell 13.7% and 12.5%, respectively, in March. It was their worst one-month declines since 2008. The S&P 500 and Dow also recorded moves of at least 1% in 21 of the 22 trading days this month.

The spread of Covid-19 profoundly affected global markets in the first quarter. Equities suffered steep declines and government bond yields fell (prices rose) as investors favoured their perceived safety.
Shares fell across developed markets as coronavirus spread and countries went into lockdown to try to contain the outbreak. Governments and central banks announced measures to support businesses and households and reduce borrowing costs.
Emerging market (EM) equities also tumbled, slightly underperforming developed markets as a strong US dollar proved to be an additional headwind.
Government bonds saw yields fall (meaning prices rose) as investors sought out assets perceived to be lower risk. Corporate bonds underperformed government bonds.
In commodities, oil prices plunged as the spread of coronavirus weakened the outlook for demand, at the same time as there was a breakdown of an agreement between oil producers to constrain supply.

Q1 was a great opportunity for day trading. Vast majority of the day trading alerts generated by our system were winning!

Stocks recorded solid gains in the fourth quarter, helping the large‑cap S&P 500 Index notch its best yearly gain since 2013—albeit one measured off a low base established by steep declines the previous December. The gains helped lift most of the major indexes into record territory, while the small‑cap Russell 2000 Index remained roughly 4% below its August 2018 peak. Technology shares performed best within the S&P 500 Index, helped by strong gains in Apple and Microsoft, which, together, ended the year accounting for nearly 40% of the sector’s market capitalization. Health care shares were also especially strong after underperforming earlier in the year. The small real estate sector declined slightly and was the sole segment to record a loss on a total return (including dividends) basis.

August has been a rollercoaster for investors, as trade tensions and fears of a recession injected uncertainty into global markets.

After much back and forth between the U.S. and China, the two nations expressed optimism and a willingness to come to a trade deal on Thursday.Yet on Sunday, the U.S. is still scheduled to slap 15% tariffs on select Chinese goods in another escalation of the more than year-long trade war.

Even as President Donald Trump said he would delay key consumer items from the list being affected this weekend, some apparel and household goods will still be impacted.

So far this month, the S&P 500 and Dow tumbled nearly 2%, while the Nasdaq sank by around 2%. Meanwhile, investors continued to flock toward safe haven assets such as gold. The precious metal jumped 8% in August.

High volatility contributed to the high quality of the day trading alerts this month.

US stocks closed July higher, with large-caps up 1.44 percent and small-caps up 1.14 percent (S&P 500 and 600 indices). They would have closed considerably higher if the month had ended on the 30^th. But the 31^st saw large-caps decline by 1.09 percent, the only burst of market volatility in July.  International stocks didn’t fare so well.  Developed-market stocks were down by 1.27 percent and emerging-market stocks by 1.22 percent (MSCI EAFE and Emerging Markets indices).  The stronger dollar accounted for these falls from a US investor’s perspective: when the dollar is stronger, the value of foreign assets measured in dollars falls. Bonds rose modestly with the Bloomberg Barclays Global Index up 0.22 percent.

Closing a remarkably strong first half of 2019, June was a positive month for stocks at home and abroad as well as for bonds. US mid-cap stocks saw the highest returns for the month, up 7.64 percent, with large- and small-cap stocks also up over 7 percent (S&P 400, 500 and 600 indices respectively). Emerging-market stocks were up by 6.24 percent and developed-market stocks by 5.93 percent (MSCI Emerging Market and EAFE indices). Bonds were up as well, with the Bloomberg Barclays Aggregate Index rising 1.26 percent. US stock markets were fairly calm, with the S&P 500 up or down over 1 percent on only two days.