Fortis Wealth Management

(888) 336-7847

April 2020
Market Update
(all values as of 06.28.2024)

Stock Indices:

Dow Jones 39,118
S&P 500 5,460
Nasdaq 17,732

Bond Sector Yields:

2 Yr Treasury 4.71%
10 Yr Treasury 4.36%
10 Yr Municipal 2.86%
High Yield 7.58%

YTD Market Returns:

Dow Jones 3.79%
S&P 500 14.48%
Nasdaq 18.13%
MSCI-Europe 3.72%
MSCI-Pacific 3.05%
MSCI-Emg Mkt 6.11%
US Agg Bond -0.71%
US Corp Bond -0.49%
US Gov’t Bond -0.68%

Commodity Prices:

Gold 2,336
Silver 29.43
Oil (WTI) 81.46


Dollar / Euro 1.06
Dollar / Pound 1.26
Yen / Dollar 160.56
Canadian /Dollar 0.73

Macro Overview

With the coronavirus continuing to impact markets and economies worldwide, governments and businesses confront an unprecedented environment. In response, massive fiscal and monetary efforts put into motion by the administration and the Federal Reserve are expected to provide unparalleled economic stimulus.

The World Health Organization (WHO) declared the COVID-19 virus a pandemic on March 11th, sending global equities lower and ending the longest bull run in U.S. history. The decline of over 20% for all three major equity indices, from record highs set in mid-February, marked an end to the bull market that began in March 2009. The International Monetary Fund (IMF) determined that the global economy has fallen into a recession due to disrupted global supply chains and a drop in commerce induced by the virus outbreak. Economists believe international markets may eventually rebound if governments around the world effectively mitigate contamination.

The $2.2 trillion stimulus plan passed by Congress, designated as the CARES Act, was the largest in U.S. history, providing critical funds to small business owners and individuals nationwide. Massive federal borrowing will fund the program in the form of U.S. government debt issuance, expected to exceed $2 trillion, in short-term Treasury bills.

Many economists and market analysts note the economic slowdown is a health crisis at its core, rather than a financial crisis, setting this downturn apart from nearly all previous recessions. Atlanta Fed President Raphael Bostic said that “this is a public health crisis and different from a typical recession.” Dallas Fed President Robert Kaplan expressed some optimism, commenting “we’ve got a great chance to come out of this very strong.”

Right now is too early to determine what the overall impact will be to industries, companies, employees, and customers over the next few months. Globalization is under pressure as global commerce has dwindled due to supply chain constraints, along with varying rules and restrictions among countries involving cross-border transactions.

The Treasury Department and the IRS announced an extension of the tax filing deadline from April 15, 2020 to July 15, 2020. Taxpayers may defer Federal tax payments until July 15th, without any penalties and interest. The deferment applies to all taxpayers, including individuals, businesses, estates, and corporations.

A historic spike of nearly 10 million unemployment claims was precipitated by mass layoffs as governmental entities mandated business closures and restrictions on public gatherings across the country. The immense jump in unemployment claims over the two weeks may worsen, yet is expected to be tempered by funds targeted for the unemployed as part of the $2.2 trillion stimulus plan. The plan also encourages small businesses to re-hire employees as conditions allow. Personal and business bankruptcies are expected to rise dramatically as a result of government-mandated shutdowns, which have decimated incomes for employers and employees across the country.(Sources: IMF, WHO, Federal Reserve, Dept. of the Treasury, IRS, Dept. of Labor)

The S&P 500 Index saw its most volatility since November 1929

Equities Technically End Eleven-Year Bull Market Run – Domestic Stock Market Overview

Equity markets in March experienced volatility not seen since the 1930s, with daily declines so sharp that rarely-used mechanisms to halt trading were activated by the exchanges on multiple occasions. The S&P 500 Index saw an average daily change of 5.2% in March, the most extreme volatility since November 1929.

Stocks fell into bear market territory, then reverted into bull market territory as equity markets rose again. This marked the shortest bear market in history. The last time the Dow Jones Index went from its bear market low to a bull market in three days was in October 1931. Stocks delivered their worst quarter in years, with the S&P 500 Index losing 20% for the quarter ending March 31st, and the Dow Jones Industrial Index surrendering 23%. The bull market that began in March 2009 officially came to an end in March, after an 11-year run. The Dow Jones Industrial Index went from its all-time high on February 12th into bear market territory in only 19 trading sessions.

With massive stimulus plans now in place, the market’s recovery has become contingent on the COVID-19 timeline for containment, effective testing, and development of a vaccine. Analysts expect that once the virus outbreak abates, any remaining stimulus efforts by the administration and the Federal Reserve will continue to act as a life preserver for the markets.

Signs of resilience at the end of March suggest equities may regain their footing sometime soon. Due to market decline, many company valuations are potentially attractive and inexpensive relative to their intrinsic values. Upcoming earnings and quarterly estimates will be closely watched as analysts determine the impact of the pandemic thus far. (Sources: S&P, Dow Jones, Bloomberg)

Massive Stimulus Efforts Bring Yields To Historic Lows – Fixed Income Update

The Federal Reserve announced a reintroduction of its Quantitative Easing (QE) program to include corporate bonds, in addition to government agency and Treasury bonds. The program essentially entails the buying of an unlimited amount of bonds in the open market, thus stabilizing prices and subduing the volatile trading caused by a potential dislocation in the market. Intervention in the corporate bond market is an unprecedented action for the Federal Reserve. Additionally, the Federal Reserve is initiating programs to ensure sufficient access to credit for public and private entities including counties, municipalities, and corporations.

The incredible demand for short-term government bonds outstripped the supply of Treasury bills issued by the U.S. Treasury in mid-March. When demand exceeds supply, short-term rates drop, sending money market rates lower. Large inflows of assets into money market funds due to market conditions created a “risk-off” rush away from volatility.

The Fed reduced its key lending rate to 0%-0.25% in March and announced that it would begin immediately buying $700 billion in Treasury and mortgage bonds. The Federal Reserve also announced that it would also be buying certain corporate bonds and municipal securities in the open market in order to help stabilize broad fixed income sectors. Buying corporate and municipal bonds is a stark deviation from traditional Fed policies as a result of the current extraordinary conditions. (Sources: Federal Reserve, Treasury, Fitch)

the $2.2 trillion stimulus plan equates to 9% of GDP, which is roughly $21 trillion

Highlights of the $2.2 Trillion Stimulus Plan For Individuals & Small Businesses

The passage of the $2.2 trillion stimulus plan, known as the Coronavirus Aid, Relief and Economic Security Act (Cares Act), provides critical funds to various sectors of the economy in the form of payments, tax breaks, loans, and subsidies to individuals and small businesses nationwide.

As the largest economic relief package in U.S. history, the $2.2 trillion stimulus plan equates to approximately 9% of GDP, which is roughly $21 trillion. The primary goal of the stimulus program is to avoid personal and business bankruptcies brought about by government-mandated shutdowns and restrictions.

Stimulus Payments: $1,200 for each eligible taxpayer earning up $75,000. Joint filers will receive $2,400 earning up to $150,000, based on 2019 or 2018 tax returns. Stimulus payment amounts decline as income levels rise. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 in annual income above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients who are otherwise not required to file a tax return are also eligible and will not be required to file a return.

Unemployment: An additional $600 per week for four months for unemployment, in addition to any state unemployment benefits.

Retirement Plan Withdrawals: Withdrawals from IRAs and company-sponsored retirement plans , such as 401(k) plans, will not be imposed the 10% penalty up to $100,000 in distributions. The waiver applies to those who have been diagnosed with COVID-19 or have experienced financial hardship related to the virus through December 31, 2020. Distributions will be taxable as income, but such taxes will be spread out over three years.

401(k) Loans: The maximum 401(k) loan amount of $50,000 has been raised to $100,000 to accommodate larger loan needs. Loan limitations are based on 50% of a 401k account balance.

RMDs: Required Minimum Distributions (RMDs) on retirement accounts including IRAs have been waived for tax year 2020.

Mortgage Forbearance: Federally-backed mortgage holders can forgo payments for six months under a forbearance program with no penalties or fees. A mortgage holder must be affected by COVID-19 and have approval from the lender.

Forecloses: All foreclosure proceedings are halted until May 18, 2020.

Student Loans: All federally-owned student loans will impose a 0% interest rate until September 30, 2020. Borrowers may also delay payments until September 30, 2020 via forbearance.

Paycheck Protection Program For Small Businesses: This program lends up to $10 million through the Small Business Administration (SBA) to small businesses with fewer than 500 employees. The allowable loan amount is calculated based on a company’s average monthly payroll. The loan may be considered a grant since loans are expected to be forgiven if the funds are used for expenses such as payroll, mortgage interest payments, rent, and utilities. (Sources: IRS;, Tax Policy Center)

tax filing and payment deadline moved from April 15, 2020 to July 15, 2020

IRS Tax Filing Deadline Extended To July 15th – Tax Policy Update

The IRS extended the tax filing and payment deadline from April 15, 2020 to July 15, 2020. The new extension deadline applies to individuals, fiduciaries (estate and trusts), small business owners, and corporations. Individuals do not need to be infected by the coronavirus or subject to quarantine in order to be eligible for the July 15th extension.

Taxpayers may to defer federal income tax payments and quarterly estimated payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. The deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers in addition to those who pay self-employment tax. For individuals contributing to an Traditional IRA, Roth IRA, or an HSA, the deadline of July 15th applies.

There is no form required, nor is there a need to contact the IRS in order to have the July 15 deadline honored. The traditional tax filing date for extensions of October 15th remains the same. The IRS urges taxpayers due a tax refund to apply sooner than the deadline in order to receive a refund check as soon as possible. (Source: IRS;, TaxPolicyCenter)

Nearly 10 Million Claim Unemployment In Just Two Weeks – Labor Market Update

The sudden loss of jobs and mass layoffs by businesses nationwide brought about the single largest increase in unemployment claims in the country’s history. Over the past five years, average weekly unemployment claims hovered around 243,000. However, 3.28 million claims were filed the week ending March 21st, and another 6.6 million claims were filed the last week of March.

Unemployment claims and the unemployment rate is expected to increase over the upcoming reporting periods. Optimistically, the recent 50-year low of 3.5% unemployment is a mitigating factor for the anticipated increase in unemployment. There are varying estimates as to how high the unemployment rate may go as a result of the virus outbreak and its economic aftermath. Some economists project 25% unemployment, last seen during the Great Depression, while other experts expect 10-15%. Regardless of the increases in unemployment claims, many economists believe that it will be short-lived as companies and small businesses are encouraged and financially incentivized by the CARES Act to re-hire employees.

The Federal Reserve is preparing for a worst-case scenario, estimating a possible 30% unemployment rate as noted by St. Louis Fed President James Bullard. The concern is that as unemployment rapidly increases, consumer confidence may fall to levels that do not support a viable economic recovery. (Sources: Dept.of Labor, Federal Reserve)