News, analysis and commentary
By Logan Robertson and Thomas J. Connelly, CFA, CFP®
April 21, 2020
World equity markets dipped lower today; the S&P 500 was down -3.0%, driven mostly by Large/Growth companies and the Technology sector. Foreign markets fared slightly better: Developed and Emerging Markets dropped -2.0% and -2.8%, respectively. The VIX crept up 4.2% today to 45.65.
US 10Y Treasury yields are down -13.02% this week to 0.571%. Investible-Grade and High-Yield Corporate yields are down -37.2% and -30.4% from a month ago, respectively. This may be a signal of investor confidence in the Fed and Treasury’s joint effort to keep businesses afloat during this period of external shock.
Oil was the big story this week, as yesterday saw unprecedented pricing in the front month futures contract. The WTI Crude Oil May contract (settlement date was today) bottomed out at -$40.32 yesterday. The June contract dropped -36.7% today to $13.49. The demand for oil has seen a massive drop over the past several months, and supply is overflowing. Suppliers are desperate to push oil out, and it seem buyers have reached the limit of what they can absorb right now. Only time will tell if we will see negative prices again month.
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