NEW YORK: The year 2020 was fierce for Wall Street, bolstered by the end of the longest bull market in history with hitting shares with the closure of COVID-19, and a bungee-reversal of hopes for re-entry. the resulting economic recovery in the bear market is the shortest on record.
Following a peak close on February 19, stocks suffered a month-long fall as a pandemic of coronavirus and related government locks shocked the damage to the U.S. economy and across the globe.
The S&P 500 .SPX> fell 9.5per percent on March 12, the biggest one-day percentage drop from the benchmark since the 1987 “Black Monday” crash, down 26.7per percent from February high and proved a bear market. , widely seen as a decline of more than 20 percent from high.
But the slide only lasted until March 23, when the S&P went down. It went on to cross its February high on August 18, marking the start of a new bull market. The 23 trading days of bear market were the lowest ever.
The S&P 2020 closed on Thursday at the highest level, as did the Dow Jones industrial average, with annual gains of 16.3per cents and 7.2per cents, respectively. Nasdaq’s 43.6per year-over-year gain was the biggest for the tech-heavy record since 2009.
GRAPHIC: S&P 500 in 2020 – https://fingfx.thomsonreuters.com/gfx/mkt/nmovaboxypa/Pastedper cent20imageper cent201609345098052.png
Along with US $ 2 trillion in fiscal stimulus by the U.S. government to bolster a easing economy, the main reason for the stock reversal in March was the monetary stimulus measures provided by the Federal Reserve, which announced a series of programs to back the economy March 23rd.
The Fed’s moves kept Treasury yields low, making stocks more attractive to investors.
GRAPHIC: S&P yield against 10-year Finance Department – https://fingfx.thomsonreuters.com/gfx/mkt/yzdvxjglkvx/Pastedper cent20imageper cent201609346083754.png
As stocks advanced and vaccine developments became more promising, investors began to turn to companies that have historically performed better as the economy moves. out of recession, i.e. small caps, and to cyclical sectors such as energy, materials, industry and finance, in the latter. part of the year.
With a large proportion of rotational names including “value” stocks, the group began to close the gap in its long-standing performance to “growth” names. The value style never re-established leadership, but the move behind the tech stores that led the rally was enough to leave growth with the better performance this year.
GRAPHIC: 1-year spread between growth stock and value – https://fingfx.thomsonreuters.com/gfx/mkt/ygdvzjazavw/Pastedper cent20imageper cent201609347068175.png
But even with the higher push late in the year, the energy sector ended up as the worst player by a large margin in 2020, while tech and consumer choice led the way higher.
GRAPHIC: Performance of S&P 500 division in 2020 – https://fingfx.thomsonreuters.com/gfx/mkt/oakvejydwpr/Pastedper cent20imageper cent201609347743131.png
Overall, there was uncertainty and fear associated with the pandemic outbreak made for the most volatile S&P 500 year in more than a decade, with the index conforming or declining 2per percent or more in over 40 sessions.
GRAPHIC: Wall Street whiplash – https://graphics.reuters.com/USA-STOCKS/SPX/qmyvmqaqnvr/chart.png
In terms of individual stock performance, Tesla jumped the line to the top spot when it was added to the S&P 500 index on December 21. It gained 743per percent on the year.
The impact of the virus was evident, with stocks benefiting from the “stay at home” environment such as the Etsy online market rising by around 300per per cent while travel names reversed the damage, with carriers Carnival and Norwegian Cruise cruise ship operators are among the worst performers.
GRAPHIC: Percent changes of the best and worst S&P 500 players for 2020 – https://graphics.reuters.com/USA-STOCKS/YEAREND/nmopabzmqva/chart.png
Tesla was the largest trader, making up nearly 7 cents per dollar, on average per day, according to Refinitiv data.
GRAPHIC: Tesla took control of 2020 in Wall St trading – https://graphics.reuters.com/USA-STOCKS/TRADING/qmyvmqybjvr/chart.png
As the low-cost, easy-to-use trading apps grew, a flood of retail investor money spread into stocks and helped fuel a year’s worth of water for new stock offerings. Retail investors have accounted for up to 25per percent of stock market activity this year, up from 10per percent of the market in 2019, according to Citadel Securities ’bankruptcy.
GRAPHIC: Institutional investors will win big in 2020 IPO – https://graphics.reuters.com/USA-STOCKS/IPOS/xegpbbebypq/chart.png
(Reporting by Chuck Mikolajczak; additional statement by Noel Randewich; Editing by Alden Bentley and Jonathan Oatis)