PAS Weekly Commentary

Weekly Advance Masks Bumpy Ride

The S&P 500 added 0.6% for the week. While that is technically true, the slight change masks the fact that the S&P 500 bounced around a 235‐point range since last Friday.

Coronavirus‐related fears remained top of mind, and the growing focus on new cases in the U.S. and abroad exerted pressure on the market's expectations for growth. The Federal Reserve announced an emergency 50 basis point rate cut on Tuesday, but the fed funds futures market expected another imminent sharp cut the next day. Treasuries charged higher throughout the week, sending the 10‐yr yield lower by 42 basis points to 0.71%.

Congress approved $8.50 bln in emergency spending measures while administration officials hinted at targeted stimulus. However, that did little to improve investor sentiment.

Countercyclical sectors like utilities (+7.9%), consumer staples (+6.2%), health care (+5.0%), and real estate (+4.8%) ended the week in positive territory with health care climbing after Joe Biden won the bulk of primaries on Super Tuesday, seizing the Democratic delegate count lead from Bernie Sanders.

Cyclical sectors bore the brunt of the pressure with energy (‐7.3%) and financials (‐4.1%) finishing at the bottom of the barrel. The energy sector fell as crude oil slid to its lowest level since mid‐2016 in the $41.00/bbl area. Reports from midweek suggested that OPEC would agree to a significant output cut, but Friday's OPEC meeting failed to produce an agreement.

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S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Indices are unmanaged and one cannot invest directly in an index. Each company’s security affects the index in proportion to its market value. NASDAQ Composite Index is a market value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Dow Jones Industrial Average is a widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service-oriented firms. Data and rates used were indicative of market conditions as of the date shown and compiled by briefing.com. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. Past performance is not a guarantee of future results. Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

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2020-96444 (Exp. 6/20)

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