It was one year ago that the global economy and financial markets were devastated by the onset of the COVID-19 pandemic. Coordinated responses by global central banks and governments flooded the markets with numerous liquidity programs in an attempt to offset the impact of forced lockdowns. Meanwhile, researchers and pharmaceutical companies went to work to develop a vaccine, which they did in record time.
While economies around the globe continue to gradually reopen, the markets have seen a tug- of-war of late as money has shifted from COVID beneficiaries – work from home, school from home, e-commerce, etc. – to those industries hit hardest from the shutdown, primarily the travel and leisure sectors due to social distancing.
The first quarter saw materially higher interest rates on the 10-year U.S. Treasury Note, higher oil prices, a blow-up in at least 2 hedge funds (1 a ‘family office”), and a ten percent correction in the NASDAQ Composite. Nevertheless, the S&P 500 index went on to record another record high.