January 22, 2021
Fourteen for '20
How do you summarize a year like 2020? Take a look at our 14 economic charts.
Farewell 2020 - Adjectives don’t fully express what this year was for capital markets, real economies, and the globe. After completing the only calendar decade in U.S. history without a recession, the new decade started with a global pandemic, economic recession, and liquidity crisis. Here are our 14 charts for 2020:
2020 capital-market forecasts were for coupon-like returns in credit, with yields and spreads in the lower quartile of historical ranges. Some even called for a Goldilocks environment of low rates, an on-hold Fed, and good enough economic growth continuing to move risk assets higher. Bond markets started the year normally, with the S&P 500 Index hitting a record high on Feb. 19 , despite increasing headlines that a novel coronavirus was seeing rapid case growth overseas.
By March, a serious sentiment shift had occurred. Equity and credit markets were beginning to price in the economic effects of a pandemic. Global oil markets added their own tail-risk following the announcement of dramatically increased production by Saudi Arabia. On March 9, oil prices saw the largest single day decline in 30 years with the S&P 500 falling 7%. With growing outflows from mutual funds and increasing levels of deteriorating economic and investor sentiment, a liquidity and credit crunch not seen since the Global Financial Crisis was materializing.