My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam!

Today, I'd like to look at where we are in the coronavirus crisis, including the economic and market implications. As the virus continues to move across the country, we can expect April to be a tough month. At the same time, there has been some positive news regarding the pandemic itself. The spread rate has dropped significantly over the past week, demonstrating the measures we’ve put in place seem to be working. But on the economic side, the news is not so good. We’ve lost more than 16 million jobs in the past three weeks. On top of that, both businesses and consumers have started to pull back. Fortunately, government programs are now being implemented, which may help mitigate the damage in the weeks ahead.

Things have quieted a bit (but only a bit) in terms of the coronavirus crisis. As such, I thought it would be a good time to provide an update on this evolving situation. Let’s start with the trends in the spread of the virus to understand what they mean in the present for the markets, as well as in the future for the pandemic itself and the economy.

Brad here. My colleague Nate Parker, senior investment research analyst on Commonwealth’s Investment Management and Research team, takes over today to discuss investment in gold and historical trends in gold prices in volatile markets. Take it away, Nate!

The economic updates released last week came in generally better than expected. Business confidence remained surprisingly resilient, while employment figures, despite being very weak, did not reflect recent layoffs. This week will again be packed with economic updates, including reports on inflation, consumer confidence, and weekly initial jobless claims. 

Today, I'd like to provide an update on the wide-ranging effects of the coronavirus pandemic. With case counts continuing to rise, we may be entering into the toughest phase of the crisis. Although there are signs of general improvement, including a slowdown in case growth, the economic damage is mounting. More than 6 million people lost their jobs in the past week, bringing the total number of jobs lost thus far to around 10 million.

March was a really tough month. After a terrible February, all major stock indices were down by double digits, leading to significant declines for the quarter as a whole. All of the major indices ended the month and quarter below their 200-day moving averages, often a sign of more trouble ahead. Plus, even the safe asset classes (fixed income and gold), which often benefit from these sorts of declines, had troubles of their own in March. Like I said, it was a really tough month.

March was a terrible month for the financial markets, with the coronavirus driving the volatility. In the U.S., markets were down by double digits. Further, the economic damage began to emerge, with three million jobs lost in a week. In response, the government quickly stepped in with a $2 trillion stimulus package. The markets took comfort in these measures, showing a slight bounce at month-end.

In the past couple of days, I have gotten several questions regarding my assertion that there were signs that the spread of the virus has been stabilizing and even showing signs of improving. With headlines shouting about the rising number of cases and a health system under threat, the real question is, how can I make that statement?

Last week’s economic updates were mixed. Some reports focusing solely on February showed a steadily growing economy, while more recent updates reflected the negative effect of the government measures taken during March to combat the spread of the coronavirus. This week will give us a chance to see just how concerned consumers and businesses are, based on the confidence updates set to be released for these sectors. We’ll get multiple looks at the current employment situation, with Thursday’s release of the weekly initial unemployment claims and Friday’s release of the March employment report.