Quarter 2 Performance Review 2020

Equities

The second quarter of 2020 witnessed a remarkable rebound in global equities markets, driven by unprecedented monetary and fiscal stimulus measures, as well as the gradual reopening of economies. Key indices showed significant recoveries:

1. S&P 500: The S&P 500 saw a strong recovery, gaining approximately 20% in Q2. This rebound was fueled by the Federal Reserve's aggressive monetary policies, including interest rate cuts and asset purchases, along with fiscal stimulus packages like the CARES Act. The index approached pre-pandemic levels by the end of June.

2. Dow Jones Industrial Average (DJIA): The DJIA also experienced a substantial recovery, rising around 18% over the quarter. The reopening of economies and better-than-expected economic data, such as improvements in employment numbers and retail sales, contributed to the optimism in the markets.

3. Nasdaq Composite: The Nasdaq outperformed other major indices, surging nearly 30% in Q2. The continued strength of technology companies, which benefitted from the shift to remote work, e-commerce, and digital entertainment, drove the index to new record highs.

Commodities

The commodities market in Q2 2020 reflected a mixture of continued volatility and recovery, influenced by the ongoing pandemic and economic reopening efforts:

1. Crude Oil: After a catastrophic Q1, crude oil prices saw a partial recovery in Q2. From lows of around $20 per barrel in March, prices rebounded to about $40 by the end of June. This recovery was supported by production cuts from OPEC+ and a gradual increase in demand as economies reopened.

2. Gold: Gold continued its upward trajectory, appreciating by about 13% in Q2. Prices rose from around $1,600 to over $1,800 per ounce. The sustained investor demand for safe-haven assets amid ongoing economic uncertainty and potential inflationary pressures from stimulus measures supported gold's rise.

3. Silver: Silver prices rebounded significantly, gaining approximately 30% over the quarter. Starting at around $14 per ounce, silver climbed to nearly $18 by the end of June. The recovery in industrial demand expectations, alongside strong investment demand, contributed to this rally.

4. Copper: Copper prices saw a notable recovery in Q2, rising from about $2.20 to $2.70 per pound. The improved outlook for global economic recovery, particularly with the resumption of industrial activities in China, played a significant role in boosting copper prices.

Summary

Q2 2020 marked a period of significant recovery and optimism in both equities and commodities markets. Equities rebounded strongly, driven by extensive monetary and fiscal support measures, alongside the gradual reopening of economies. Commodities exhibited mixed performances, with crude oil recovering from historic lows and precious metals like gold and silver continuing to attract safe-haven investments. The overall sentiment in the markets improved markedly, reflecting hopes of a V-shaped economic recovery despite the ongoing challenges posed by the COVID-19 pandemic.