April was an excellent month for stocks as investors cheered all of the support that central banks and governments are providing. The total value of the support, both fiscal and monetary, is close to the total amount of income that is expected to be lost…
We believe we are still in the Downturn phase of the market, but recognize vigilance is required when using this framework in these unprecedented times. The economic damage taking place has direct implications for future recovery. Eventual levels of unemployment, financial leverage, investment spending and consumer confidence will determine how quickly economies can recover.
The novel coronavirus, government and central bank stimulus and a start to reopening economies in some areas drove the markets in April. Additionally, oil markets collapsed as an oversupply caused the price of oil futures to fall into negative territory for the first time in history. Equities looked past the oil market flare up and delivered strong positive returns, with US markets up 13%, recovering close to 60% of the decline.
What should pension plan sponsors be doing now in light of what has happened in the past few months? This free webinar discusses 10 important items that plan sponsors should address now to ensure that they come out of the current crisis on solid ground.
We find ourselves in difficult times. The global effects of COVID-19 have wreaked havoc on investment markets, on daily life, and on institutional investment pools such as pension funds and endowments. Treasury yields have plummeted, credit spreads have widened, and major equity indices have moved down and up at historic rates. Find out what institutional asset owners can do now to not only weather the storm, but to also thrive in the face of unparalleled difficulty in this webinar.
Liquidity management is of increasing importance on the agendas of trustees and plan committee members, with many plans potentially now paying out more cash out than is coming in and with the recent market volatility having a negative impact on asset levels.
The US Federal Reserve unveiled extensive new programs to reduce the potential for major companies to declare bankruptcy, including essentially lending directly to companies that were rated investment grade as of March 22. The extent of support provided by the Fed and Congress now reaches almost 20% of US GDP.
We believe we are in the Downturn phase of our FOURcast process, although we recognize the need for judgement when using this framework. Downturns are usually preceded by very high equity valuations, gradually weakening economics and poor credit conditions.
Plan Sponsors embarking on an annuity purchase face additional uncertainty and risks due to the impact of COVID-19. Transactions will continue, but awareness of market conditions and performing due diligence of insurance providers takes on additional importance.
The novel coronavirus and government reactions to it drove all aspects of markets throughout March. Equities saw some of the sharpest daily moves ever (up and down), with US markets down 14% for the month and 21% across the quarter. Long-term corporate bond yields rose for the month as historically low Treasury yields were offset by rising credit spreads due to fears of defaults in a COVID-19 economy.