Following a less-than-rosy start to the year, the second quarter of 2020 was marked by a strong rebound across financial markets. While the ongoing coronavirus pandemic, or COVID-19, was still present, certain parts of the country experienced a steady decline in positive case counts and began the early stages of their re-opening phases. This, along with society adjusting to the new normal under quarantine more generally, has led to the start of a reversal in the unemployment rate and a rise in U.S. retail sales. Domestic equities responded positively to this news, with the S&P 500 Index gaining 20.54% during the quarter – the best quarterly return on record since 1998.

The first quarter of 2020 was a difficult time for financial markets and the world more broadly.  In addition to the medical toll, the sweeping pandemic known as the novel coronavirus, or COVID-19, and the shutdown it created shuttered small businesses, disrupted global supply chains, stunted demand for goods, and caused unemployment to spike.  For the stock market, the result was a decline of 19.6% as measured by the S&P 500 Index. While the market did rally and rebound sharply in the quarter’s final two weeks, the first three months of 2020 still ended as the worst on record since 1987.  Meanwhile, the CBOE Volatility Index, a common measure of market volatility informally known as the VIX, tripled before calming during the late-quarter rally. While no area of the stock market was immune from this broader selloff, healthcare, technology, and the most defensive sectors like utilities and consumer staples held up relatively better.  On the other hand, the energy sector was by far the worst hit, as a March falling out between major oil producers Saudi Arabia and Russia sent oil prices plunging as low as $20 per barrel. Frustrated by Russia’s unwillingness to agree to production cuts, the Saudis vowed to price the Russians out of the market, leading oil markets to post their largest one-day decline since the Gulf War.