U.S. equities: Nowhere to hide

U.S. equities have arguably been the best asset class in which to invest over the past five years, however since the end of February, they have collectively put on their worst performance since 1987. Only 26 constituents of the Russell 1000 index were trading in positive territory at the market close March 20, most of which were consumer staples, grocery and health-care companies.

The median return of the index members through March 20 was -37.1%; comparatively, the median return in the fourth quarter of 2008 was -16.2%. The cross-sectional volatility, or dispersion of individual stock returns, of the index is about 18.9% year-to-date. That number was around 14.4% in Q4 2008, and 13.9% in the decline of Q4 2019.

Assets generally regarded as safe offered relief as the coronavirus-driven crisis took hold in March. The Bloomberg Barclays Aggregate Bond index was up as much as 6% year-to-date by March 9, while the Bloomberg Barclays Long U.S. Treasury index was up 28% year-to-date. Both have since pulled back, the aggregate index was up 1.75% at the March 20 close as long Treasuries were up 15.1%. Gold has similarly handed back earlier gains, briefly dipping into the red, but stood at 0.73% in the afternoon March 20.

As of Monday morning, the World Health Organization reported 294,110 confirmed cases of COVID-19, 15,219 of which were in the U.S. and 151,293 collectively in Europe.