US actions in 2020: a year for history books

NEW YORK (Reuters) – The year 2020 has been a wild one for Wall Street, reserved for the end of the longest bull market in history, with stockpiles since the closures of COVID-19 and a return of the cordon in economic hopes that resulted in the shortest bear market on record.

After closing at a record high on February 19, stocks fell by a month while the coronavirus pandemic and related government blockages sowed panic over the damage to the US and global economy.

A decrease of 9.5% fell in the S&P 500 .SPX> on March 12, the largest percentage drop in the benchmark since the fall of “Black Monday” in 1987, down 26.7% from the February high and confirmed a large-scale bear market. seen as a decline of over 20% from the maximum.

But the slide only lasted until March 23, when the S&P went down. It continued to exceed the February high on August 18, marking the beginning of a new bull market. The 23 trading days of a bear market were the shortest.

S&P closed at a record high on Thursday 2020, as did the Dow Jones Industrial Average, with annual gains of 16.3% and 7.2%, respectively. The Nasdaq year-over-year gain of 43.6% was the highest for the 2009 heavy technology index.

GRAPH: S&P 500 in 2020 –

Along with the US government’s $ 2 trillion fiscal stimulus to support a strong economy, a major reason for the return of stocks in March were the monetary stimulus measures provided by the Federal Reserve, which announced a series of programs to support the economy in March. . 2. 3.

Fed moves have kept Treasury yields low, making stocks more attractive to investors.

GRAPH: 10-year S&P vs. Treasury dividend yield –

As stocks continued to recover and vaccine developments became more promising, investors began to focus on companies that historically outperform as an economy emerges from recession, namely small-cap capitalization, and cyclical sectors. , such as energy, materials, industry and the financial sector, in the latter part of the year.

With much of the cyclical denominations comprising “value” stocks, the group began to narrow the gap in what had long been a period of underperformance over “rising” denominations. The value style has never fully regained dominance, but the momentum behind the technology stocks that led the rally has been enough to let growth perform better this year.

GRAPH: 1-year spread between growth and stocks –

But even with the strongest growth force at the end of the year, the energy sector came out as the weakest performer by a large margin in 2020, while technology and discretionary consumers led the way above.

GRAPH: Performance of the S&P 500 sector in 2020 –

All in all, the uncertainty and fear of the pandemic have caused the most volatile year of the S&P 500 in the last ten years to rise or fall by 2% or more in more than 40 sessions.

GRAPHIC: Wall Street whiplash –

In terms of individual stock performance, Tesla climbed to the top when it was added to the S&P 500 index on December 21st. He earned 743% a year.

The impact of the coronavirus was evident, with stocks benefiting from the “stay-at-home” environment, such as the Etsy online market, which garnered about 300%, while the names of the voyages suffered the most damage from cruise ship operators. Carnival and Norwegian Cruise among the worst performers.

GRAPH: Percentage of changes in the best and worst S&P 500 performance for 2020 –

Tesla was by far the most traded, accounting for nearly 7 cents on every dollar, on average every day, according to Refinitiv data.

GRAPH: Tesla dominated 2020 in Wall St trading –

The rise of cheap and easy-to-use trading applications has triggered a flood of retail investor money and helped fuel a pool year for new stock offerings. Retail investors accounted for up to 25% of stock market activity this year, up from 10% of the market in 2019, according to brokerage Citadel Securities.

GRAPH: Institutional investors gain heavily in 2020 IPOs –