For general media inquiries (members of the media only) please call (816) 340-7033 or email us.
We're always looking for exceptional team members.
A superior benefits and rewards program is an essential part of our commitment to our employees.
By Victor Zhang - February 28, 2020
Fear has gripped equity markets as investors attempt to assess how deeply the rapid spread of coronavirus (COVID-19) will affect the global economy.
Key stock market benchmarks have fallen into correction, which means they have dropped 10% from a recent high. This includes the S&P 500® Index, which set a record by correcting over the course of just six trading sessions. The Dow Jones Industrial Average and the Nasdaq Index also corrected.
Investors have experienced 26 corrections since World War II and 10 in the last 20 years. On average it has taken approximately four months for the market to recoup its losses. There’s no way to know if stocks will head up from here or continue into a bear market, which is generally considered to be a 20% decline from a recent high. There have been two bear markets in this century, the most recent accompanying the global financial crisis which ended 2009.
In a recent post, I discussed the parallels between COVID-19 and the SARS outbreak of 2002-2003. My colleagues at Avantis Investors have looked back even further, reviewing some of the lessons learned from viral outbreaks dating as far back as 1918. History tells us viral outbreaks are disruptive, they take a tragic human toll and they understandably cause worry in the near term. But they eventually come to an end and recovery begins.
COVID-19 has had a major impact on the supply side of the global economy. Quarantine and other restrictions have proven to be effective means of controlling the outbreak in China, which is a critical link in the global supply chains of companies of all stripes. Though manufacturing is beginning to recover, and workers are slowly returning to their offices, they’re a long way from operating at capacity.
In the U.S., businesses as diverse as technology companies, retailers and tow truck manufacturers can expect to experience delays in receiving finished goods or parts. Apple was one of the first companies to warn investors about disappointing results due to virus-related production delays. More recently, Microsoft told analysts demand for Windows products was in line with expectations, but the recovery in manufacturing has been slower than expected.
So far, employment and household income aren’t affected by the supply disruptions. While demand for some consumer discretionary businesses is weaker, demand for health care goods and services are expected to rise. Response to COVID-19 has altered consumption behaviors but not harmed aggregate global economic demand. In the coming weeks we will pay close attention to monitor how this outbreak affects consumer spending and employment.
We expect volatility to continue as markets react to news headlines about COVID-19’s impact on both communities and economies. Describing this disruption as transitory isn’t meant to diminish the very real impact on those who are affected by COVID-19 or downplay the near-term repercussions on businesses and the economy. Rather, it reflects our view that, after a period of uncertainty, this event will find a bottom and the recovery will begin.
In the meantime, we haven’t altered the way we execute our investment strategies for clients. As difficult as it may be under the current circumstances, remaining disciplined against human behavioral tendencies is a proven way to achieve long-term success.
Here’s the role the Federal Reserve has played in the 2020 economy, and what policymakers are expecting for the rest of the year.
Asset-backed securities can be an attractive asset class just slightly off the traditional bond investor's beaten path. Learn whether they deserve an allocation in your fixed income portfolio.
November 16, 2018
Liquidity, volatility and credit spreads may all have a role to play in the year ahead, according to Head of Investment Solutions Cleo Chang.
Providing a concise, easy-to-scan overview of current opportunities and risks in today's global markets.
The coronavirus has affected markets, but it’s important to keep those effects in context. Get CIO Victor Zhang’s thoughts on the latest correction.
References to specific securities are for illustrative purposes only, and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
American Century Investments is not responsible for and does not endorse any comments, content, advertising, products, advice, opinions, recommendations or other materials on or available directly or via hyperlinks from Facebook, Twitter or any third-party website. Facebook, Twitter and LinkedIn are registered trademarks of their respective owners.