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12 Month Look-back & Trends

On this time last year, the WHO announced COVID-19 as a world pandemic. Here’s a review of major business, economy, and market metrics over the last 12 months.


Markets:


  • The S&P 500 and the Nasdaq reached an all-time high on Feb. 19, 2020. On March 11, the indices closed 20% lower than the February high. On March 23, the indices closed 30% less than the February high.

  • The market started recovering as the government announced its $2.2T Coronavirus Aid, Relief, and Economic Security Act (CARES) on March 27, 2020.

  • As people started to rely on technology more than ever due to the pandemic, tech companies' stocks surged. The Nasdaq composite index, made of tech stocks, surpassed its February high on June 8, earlier than the S&P 500, which took until Aug. 20 to surpass its previous high.

  • Although the Nasdaq led a stock sell-off this month, leading to a decline in tech stock prices, the S&P 500 is up 42%, and the Nasdaq composite index is up 65% since March 11, 2020.

Stimulus package:

  • The U.S. government has passed $5T in stimulus, including the $1.9T approved this week. 6x more than the $840B spent on stimulus during the 2008 recession.

  • The first round of stimulus passed on March 27, 2020, and it included $1,200 checks for adults earning less than $75,000, with reduced payments for those earning up to $99,000.

  • As of June 2020, 36% of funds from the stimulus payments were saved, and 35% was spent to pay off debt, according to the Federal Reserve Bank of New York.

  • The second round of stimulus — including $600 checks — was passed towards the end of December.

  • Retail sales in January rose by 5.3% from December, which saw a 1% month-over-month decline. In January 2020, retail sales were up by 7.4%. Overall consumer spending increased by 2.5% in January 2021, following a 10% income increase.

Jobs:

  • The total number of jobs in the U.S. is 9.5 million less than in February 2020. Around 22.3 million jobs were lost between March and April last year.

  • The unemployment rate reached a record high of 14.7% in April 2020. It is at 6.2% as of last month, compared to 3.5% a year ago.


Businesses:

  • Since last March, around 487,577 new businesses have been opened, and 260,000 have reopened after closing due to lockdown restrictions. 7,129 businesses have filed for bankruptcy, compared to 5,519 in 2019, the highest since 2013.

  • Retail has been one of the hardest-hit areas by the pandemic, with 630,000 outlet closures. It accounted for 20% of all corporate debt in Q4 2020.

Second-order effects:

  • Many people turned to retail trading due to a lack of sports betting and casinos. Brokerage firm TD Ameritrade reported 608,000 new accounts opening in Q1, with 66% opening in March.

  • Last year, retail investors accounted for around 23% of overall equity trading in the U.S. — 2x the 2019 level.

www.mattallendevelopment.com

mslonaker@mattallendevelopment.com




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