On Wednesday a year ago, the COVID-19 crash began in the stock markets, triggering a decline that led stocks into a bear market that bottomed out about a month later.
The chaos wasn’t limited to stocks. The treasury market has almost gotten stuck, causing extraordinary reactions from the Federal Reserve and other central banks. A soon-to-expire oil futures contract in April traded in negative territory for the first time and closed as investors sought refuge and dumped assets that were deemed risky.
Stocks have since moved back from their March 23 low to push for record territory. Deutsche Bank analysts have broken down the performance of major global financial assets from February 21 through Tuesday. The following chart ranks them according to performance and shows their maximum drawdown in the last year:
Deutsche Bank
While stocks have roared back, led by the tech and tech-centric stocks that have benefited most from the pandemic momentum, the leading companies in terms of total return are a pair of metals – copper
HG00, + 3.02%
and silver
SI00, + 0.77%
– Benefit from expectations for an economic recovery.
It should be noted, however, that two assets that were not included in the list of “big” global financial assets performed even better. Bitcoin
BTCUSD, + 3.07%
rose 395.8% over the twelve-month period while the NYSE FAANG + index for large-cap tech stocks rose 85.8%, Deutsche Bank macro strategist Jim Reid noted in a note.
A major global correction occurred on Monday, February 24, 2020 as the number of Italian COVID-19 cases jumped from single-digit numbers to 220 over the weekend, Reid recalled.
“Had you been told 12 months ago that we would now have nearly 113 million cases and 2.5 million deaths (both likely underestimated) with much of the world under lockdown for most of the year, you would probably have found it hard around.” Understand the course of the markets, ”he said.
At the same time, the Fed and the European Central Bank alone added around $ 6 trillion to their balance sheets last year, while governments injected trillions of dollars in cash, with more to come from Washington.
Economists, meanwhile, appear to be in a race to improve their forecasts for economic growth for 2021.
Stocks and commodities were in rally mode on Wednesday. Stocks largely shook off the recent wobble that was linked to rising bond yields as expectations for growth and inflation rose.
The Dow Jones industrial average
DJIA, + 1.35%
rose over 400 points, or 1.3%, after hitting an intraday record during the S&P 500
SPX, + 1.04%
gained 1% and the Nasdaq Composite
COMP, + 0.62%
gained 0.5%, most recently on Wednesday afternoon.
