Denali Wealth Management

2020 Q2 Market Commentary

General Market Commentary as of June 30, 2020

After consumer spending fell a record 13.6% in April due to the lockdowns, the reopening of states and businesses around the country helped stocks rebound from their March lows. The month of April saw indices logging their best monthly gains since 1987. Combine that with a strong May and it was the best two-month performance since 2009. The month of June logged modest gains even as a resurgence of coronavirus cases and the civil unrest slowed the rally. The S&P 500 finished the second quarter up 19.95%, the Dow Jones Industrial Average finished the second quarter up 17.77%, and the Nasdaq Composite finished the second quarter up 30.63% and moving into positive territory for the year.

The Fed has shown that it is willing to do whatever is needed to provide support to the economy and the markets. Congress has continued to introduce legislation aimed at supporting Americans through the recovery. Governors across the country have ruled differently from state to state on plans for reopening, complicating economic forecasting. Add in the potential for areas closing again due to reported spikes in data and it becomes clear the economic rebound will be limited until consumers regain the confidence that they are safe to resume regular activities.

Hundreds of companies have withdrawn their forecast for 2020 making it difficult for investors to value stocks. A second wave of coronavirus cases continues to be the leading risk facing fund managers. There is still plenty of uncertainty over the shape and speed of the recovery yet it would be unlikely to see the record volatility we saw in the first half of the year repeat itself in the second half of the year. At the same time, political jousting seems eminent to only ramp up as the fall election nears. If the first two quarters were any indication, we can expect the unexpected.

Market Recap

Tot Return3-MO*12-MO*3-Year*5-Year*Closing Value
S&P 50019.95%5.39%8.56%8.49%3,100.29
Dow Jones Industrial Average17.77%-2.96%6.53%7.94%25,812.88
NASDAQ Composite30.63%25.64%17.88%15.07%10,058.77

Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.

All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.

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