The stock market moved generally higher during the second quarter, although we saw a fairly sharp diversion between the results of domestic large company stocks and smaller company stocks. For the quarter, large US stocks were up 8.5%, small US stocks were up 4.3%, and foreign stocks were up 5.2%. Bonds rebounded from first quarter losses, rising 1.8% for the second quarter.
On December 14, as a year of staggering loss was coming to a close, Covid-19 vaccine distribution began in the United States. As of this writing, more than 124 million people have received the vaccine, while 46 million people (more than 14% of the total US population) are fully vaccinated. The accelerating pace of vaccination is good news from a public health perspective, a welcome harbinger for the many households that have suffered financially during the pandemic, and critical to the economic recovery of the nation.
For the first quarter, large company stocks in the US rose 6.2%, smaller company stocks were up 12.7%, foreign stocks were higher by 3.5%, and US bonds (broadly measured) were down -3.4%. As vaccination rates grew, business restrictions relaxed and employment forecasts brightened. Optimism about the US economy grew during the first quarter, helping to support the markets. Over the last year, market growth
The three major events of the year—the coronavirus pandemic, racial unrest, and a contentious presidential election— combined to present an environment that we could scarcely have imagined twelve months ago. There has been plenty of fallout from these events, including the heartbreak over lives lost, economic hardship, a painful confrontation with systemic racism, and the thorough disruption of communities and local economies.
As of this writing, more than 78 million cases of COVID-19 have been confirmed worldwide, and more than 1.7 million deaths have been attributed to the pandemic—numbers that continue to rage out of control. These are losses that overwhelm the mind. The enduring legacy of the pandemic will be the massive void left by those who have died.
In spite of heightened volatility in stocks as the quarter drew to a close, the markets generally moved higher over the period. For the quarter, US large company stocks rose 8.9%, smaller company US stocks were up 4.9%, foreign stocks were higher by 4.8%, and US bonds, broadly measured, were up 0.6%. While stock indexes were higher for the quarter, the markets were mixed, with small company and foreign stocks having lost value, while large company stocks have moved higher.
As we concluded the first full quarter of economic fallout from the coronavirus pandemic, stock values were generally higher, with large company stocks up 20.5%, smaller company stocks up 25.4%, and foreign stocks up 14.9%. Bonds, broadly measured, rose by 2.9%. These returns have an impressive luster in part because they are measured relative to the market trough of late March. Overall stocks remain lower for the year.
Nowhere in any of the 2020 economic outlook reports was there any mention of a global pandemic, yet here we are. While journalists from sensible corners of the news media world have for years issued warnings about the health and economic risks of pandemics, the prospects for such an event seemed distant and abstract to most. The machinery of the global economy chugged on.
The novel corona virus outbreak began with a single known case on December 10 in Wuhan, China. By the month’s end, the new virus was identified by Chinese health officials. In mid-January, cases were being reported in other countries, and the virus began to spread rapidly. Throughout March, new infections and upsetting mortality reports issued by countries around the globe worsened as the days passed.
The U.S. stock market closed the year with significant gains. Large company stocks in the U.S. were up 31.5%, small company stocks rose 25.5%, and bonds returned 8.7%. Foreign stocks were also up, rising by 22%.
When we entered 2019, the stock market had just endured steep losses in December 2018, the worst December for stocks since the Great Depression. The markets rebounded swiftly and forcefully in the first quarter of 2019, contributing to a good year for stocks.
The U.S. stock market dipped notably in early August and exhibited considerable volatility throughout the month. The market drop and subsequent instability, which stretched into September, were related to concerns about growth prospects for the U.S. and global economies. These concerns were validated by the Fed’s decision to cut interest rates in late July—the first rate cut since the Great Recession.
This article is from our archives as part of the 100th issue special, celebrating twenty-five years of quarterly newsletters.
Policy matters. Natural Investments has participated in public policy conversations and attended meetings on the Hill in Washington, D.C., for years and will continue to serve as a voice for fair and just financial regulations.
It’s been over a year since the fall of Lehman Brothers sparked major tremors in the U.S. financial system that rippled around the planet. Though lawmakers called for reform, much of the financial services industry remains unchanged a year later. The wholesale restructuring advocated by the social investment industry, economists, and academics has thus far been met with strong opposition from the industry, and Congress’ lack of expertise left them unable to do anything other than infuse large banks with cash.
The needed structural changes in our system remain conceptual and haven’t even been fully debated. Yes, there were calls for bonuses to be recalled and executive pay to be restricted,
Stocks and bonds continued to perform well during the second quarter, in spite of an uncertain trade environment and worrying international tensions with Iran. For the quarter, the stocks of U.S. large companies were up 5.0%, U.S. small companies rose 2.4%, and foreign stocks rose 4.3%. U.S. bonds were up 3.0%.
While the markets ended higher over the three-month period, the rise was interrupted in May, when markets declined steeply after the president increased tariffs on Chinese goods. Reports of slowing global economic growth also contributed to the sell-off. The president likewise imposed tariffs on Mexico but suspended them before they took effect.