Market Review

Monthly Market Review

Data as of April 30, 2020


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U.S. Stocks

Several of the major indexes bounced off bear market lows in April and posted their best monthly returns since 1987, as investors anticipated a partial reopening of the global economy. All sectors in the S&P 500 Index recorded gains, although they varied widely. Energy shares rose nearly 30% on a total return (including dividends) basis, despite domestic oil prices falling deeply into negative territory (USD -38 per barrel) on April 20. The beleaguered sector remained down nearly 36% for the year to date, however. Consumer discretionary shares gained almost 21%, and the 14% gain in technology shares returned the sector to positive territory for the year. Utilities shares lagged, rising a bit more than 3%.

Flattening the Curve Fosters Reopening Hopes

Several positive trends in the fight against the coronavirus seemed to play the lead role in bolstering sentiment in April. Stocks fell sharply on the first day of the month, as investors reacted to warnings from White House officials of the possibility of up to 240,000 deaths in the U.S., even with mitigation efforts in place. Over the following days, however, signs emerged that some of the hardest‑hit regions in the U.S. and elsewhere were “flattening the curve” of the pandemic in terms of hospitalizations and fatalities. The University of Washington’s widely watched model predicting the course of the outbreak also significantly lowered the expected number of deaths in the U.S. Stocks continued to rise through mid‑month, as governors in several states began announcing plans for the gradual reopening of businesses and public facilities, such as state parks and beaches. Boeing and other major firms also announced plans to partially reopen some manufacturing facilities.

Glimmers of hope appeared on other fronts as well. On April 17, stocks jumped after unofficial reports surfaced that Gilead Sciences was having success in U.S. trials of remdesivir, its experimental treatment for COVID‑19, the disease caused by the coronavirus. A week later, stocks fell following a report that remdesivir had failed in an early clinical trial in China, but Gilead quickly disputed the findings, stating that the trial was inconclusive given its early termination due to a lack of participants. Indeed, on April 29, Gilead Sciences announced that, in a large U.S. trial, remdesivir had performed well reducing the severity of the disease. Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, stated at the White House that the drug had a “clear‑cut, significant, positive effect in diminishing the time to recovery.” Progress on a vaccine remained much slower, but investors seemed to be encouraged by reports that an Oxford University team might have one available as early as September.

Total Returns




Dow Jones Industrial Average



S&P 500 Index



Nasdaq Composite Index



S&P MidCap 400 Index



Russell 2000 Index



Past performance is not a reliable indicator of future performance.
Note: Returns are for the periods ended April 30, 2020. The returns include dividends based on data supplied by third‑party provider RIMES and compiled by T. Rowe Price, except for the Nasdaq Composite Index, whose return is principal only.
Sources: Standard & Poor’s, LSE Group. See Additional Disclosures.

Consumer Spending Plummets as Nearly One‑Fifth of Workers Lose Jobs

While hopes for an eventual exit from the pandemic may have grown, evidence of the stark toll it is currently taking on the economy accumulated and appeared to restrain the market’s gains, particularly late in the month. Weekly jobless claims declined from their late‑March peak but remained at historic highs and exceeded consensus expectations. On April 30, the Labor Department reported that another 3.8 million Americans had filed for unemployment in the previous week, bringing the six‑week total to more than 30 million, or approximately 18% of the U.S. working population. March personal incomes also dropped more than expected, while personal spending tumbled 7.5% and retail sales plunged 8.7%—both the largest drops on record. The strain on corporate profits was also visible. At the end of the month, analysts polled by FactSet were estimating that overall earnings for companies in the S&P 500 would fall about 14% (on a year‑over‑year basis) in the first quarter and are expected to contract by 37% in the second quarter.

Even as most analysts agreed that the U.S. had entered a steep recession in March, investors drew hope from a new round of stimulus measures. The S&P 500 Index had its best day of the month on April 8, after the Federal Reserve announced a program promising USD 2.3 trillion in loans to smaller businesses and municipalities. The Fed also announced it would allow investment in lower‑quality debt as part of its Term Asset‑Backed Securities Lending Facility and other emergency lending programs. Later in the month, President Donald Trump signed into law a USD 484 billion spending bill to replenish a new but swiftly depleted program providing loans to small businesses and provide further funding for coronavirus testing and hospitals.

Long Recovery Expected

The market’s strong rally off its March 23 lows has surprised many observers, especially as data released over the following weeks have seemed to indicate that the recession will be steeper and more prolonged than most early estimates. It seems likely that the primary driver of the rally, however, has been the unprecedented level of fiscal and monetary stimulus—around USD 10 trillion and counting—pumped into the global economy. T. Rowe Price’s head of global multi‑asset investing, Sébastien Page, notes that the liquidity‑fueled rally has heavily favored growth stocks and large‑caps over small‑caps and value shares, which would be expected to do better if a rebound were imminent. Instead, these divergences appear to suggest that the market is pricing in a long recovery.

Additional Disclosures

Financial data and analytics provider FactSet. Copyright 2020 FactSet. All Rights Reserved.

London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2020. FTSE Russell is a trading name of certain of the LSE Group companies. “Russell®” is a trade mark of the relevant LSE Group companies and is used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.

The S&P 500 Index and S&P MidCap 400 Index are products of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”) and have been licensed for use by T. Rowe Price. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); T. Rowe Price is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index and S&P MidCap 400 Index.


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Important Information
This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action.

The views contained herein are as of the date written and are subject to change without notice; these views may differ from those of other T. Rowe Price associates.

This information is not intended to reflect a current or past recommendation, investment advice of any kind, or a solicitation of an offer to buy or sell any securities or investment services. The opinions and commentary provided do not take into account the investment objectives or financial situation of any particular investor or class of investor. Investors will need to consider their own circumstances before making an investment decision.

Information contained herein is based upon sources we consider to be reliable; we do not, however, guarantee its accuracy.

Past performance is not a reliable indicator of future performance. All investments are subject to market risk, including the possible loss of principal. All charts and tables are shown for illustrative purposes only.

T. Rowe Price Investment Services, Inc., distributor, and T. Rowe Price Associates, Inc., investment advisor.

© 2020 T. Rowe Price. All rights reserved. T. Rowe Price, INVEST WITH CONFIDENCE, and the bighorn sheep design are, collectively and/or apart, trademarks of T. Rowe Price Group, Inc.

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