The ups and downs of financial markets have intensified unprecedentedly
Our reporter Jiang Huadong
Looking back to the development of the global financial market in 2020, "unprecedented" shocks and recovery are the main thread.
One is the unprecedented decline in global stock markets at the beginning of the year.
At the beginning of the year, under the impact of the new crown pneumonia epidemic, especially after the rapid spread of the epidemic in the United States and Europe in March, investor panic and uncertain future economic prospects caused the stock market to plummet.
As of the close of March 31, the Dow Jones Industrial Average of the New York stock market fell more than 23.2% compared with the end of last year, the largest quarterly decline since 1987.
Another set of data can also give a glimpse of the panic of investors under the epidemic.
Institutional research shows that it took only 36 trading days for the global stock market to fall 20% in 2020, and only 40 trading days for a 30% drop.
This rate set the fastest rate of decline in the global stock market since daily records.
Second, the stock market recovered at an unprecedented speed in the middle of the year.
After suffering a severe setback in the first quarter, the global stock market basically regained its lost ground in late August.
Taking into account the base effect of the rebound after the decline, to make up for the highest 36% decline in the Dow Jones Industrial Average in the first quarter, a higher growth rate is required.
Institutional research believes that historically, it generally took about 2 years for the global market to recover from a 20% decline; it would take 3 years or more to recover a 30% decline.
In 2020, this process only took about 5 months.
Affected by the attempts of major economies to restart the economy with the epidemic, and the launch of emergency assistance programs by the governments and central banks of major countries, the stock markets of advanced economies and emerging market countries have seen substantial increases.
The further rebound of global stock markets in the third quarter smoothed out the decline at the beginning of the year, but showed an uneven trend.
The Federal Reserve adjusted its monetary policy framework, emphasizing the decisive role of the average inflation rate in interest rate policy. Investors believe that the US loose policy will continue until around 2023.
Even in the face of a rebound in the fall and winter epidemics in the United States and Europe and the stranded fiscal stimulus plan, the S&P 500 still showed an increase of 8.47% in the third quarter.
Affected by the repeated epidemics in many European countries, the European market performed slightly weaker.
The third is the unprecedented rebound after the huge decline.
After regaining lost ground in the second and third quarters, the upward trend in global stock markets has not stopped.
Especially in November, the political uncertainty that restricted the stock market disappeared with the end of the US general election. The epidemic factor was hedged by the positive factors of the vaccine, and the global stock market continued to rise sharply.
Looking back at the development of the stock market for the whole year as of December 17, in addition to the Eurozone and the United Kingdom, the US S&P 500, Japan's Nikkei Average, and MSCI Emerging Markets Index achieved growth rates of 15.22%, 13.13%, and 13.38%, respectively. .
In terms of the bond market, government bonds of major countries around the world exhibited divergence and shocks and a U-shaped trend.
In the first quarter, the overall yield of government bonds of major countries dropped significantly.
Affected by the decline in the prices of high-risk assets such as stocks in February and March and the spread of the epidemic, major global investors’ preference for safe assets has increased significantly. The yield on 10-year U.S. Treasury bonds fell from 1.92% to 0.63%, and 10-year German Treasury bonds The rate of return dropped from -0.19% to -0.49%.
In comparison, Italy and Spain, as the first countries to be hit hard by the epidemic, the 10-year government bond yields rose from 1.41% and 0.47% to 1.57% and 0.71%, respectively.
The differentiation trend eased in the following three quarters.
In the second and third quarters, affected by the monetary and fiscal stimulus of the United States and Europe, the yields of 10-year government bonds in the United States and Germany fluctuated slightly.
The yields of Italian and Spanish government bonds, which are more risk-sensitive, have declined to varying degrees.
Entering October and November, the global bond market has intensified volatility.
Under the combined effect of various factors such as the new round of fiscal stimulus plan disputes, the U.S. election, the rebound of the U.S. and Europe epidemic, the U.S. 10-year treasury bond yield is basically in the range of 0.84% to 0.87%, and the 10-year treasury bond yields of major European countries are showing Various degrees of decline.
In addition, the overall performance of the global commodity market is not as good as that of the stock market.
As of December 17, the S&P Goldman Sachs Commodity Index still had a gap of 8.84% from the beginning of the year.
Looking back at the trend throughout the year, the bulk commodity market showed two major trends.
One is the differentiation of energy and basic metals.
As of December 16, the prices of aluminum, copper, and zinc increased by 42.74%, 69.42% and 22.68% respectively from the beginning of the year.
The price of WTI crude oil gradually recovered after falling to a negative figure in late April. It rose to US$47.82/barrel on December 17, but still fell 22.03% from the beginning of the year.
Second, the trend of crude oil and base metals diverged from that of precious metals.
The trend of crude oil and base metals throughout the year showed a trend of first falling and then rising, while precious metals such as gold showed a trend of first rising and then falling.
In the first three quarters, supported by global investments seeking safe assets, the prices of precious metals such as gold and silver continued to rise.
Entering the fourth quarter, the price of precious metals showed a downward trend.
As of December 15, the price of gold on the London Metal Exchange fell 2.2% from the end of the third quarter.