2020 – A year of strong volatility for Wall Street stocks

2020 is a year of strong volatility for Wall Street stocks, when stocks sometimes fall sharply due to the impact of the COVID-19 pandemic, but sometimes revive and hit a record high.

Outside the New York Stock Exchange, USA. (Photo: THX / TTXVN)

Quincy Krosby, strategist at Prudential Financial, said that 2020 is a year of strong volatility for Wall Street stocks, when there are times when stocks fall sharply due to the impact of the epidemic of acute respiratory infections COVID-19, but has once again risen and hit record highs, thanks to progress in COVID-19 vaccine production.

Let’s take a look at the remarkable milestones of US stocks this year.

March: Historical “plunge”

After a rather quiet period in January and February, Wall Street unexpectedly “plunged” in March, due to fear overshadowed the emergence of the COVID-19 pandemic and the consequences for the major economy. best of the world.

March 9, before the sharp decline of US stocks, the “automatic shutoff” mode was activated, causing transactions to pause for 15 minutes.

On March 16, US stocks continued to witness a “dark” session with the strongest decline since 1987.

The sell-off in the market has nearly erased Wall Street’s Dow Jones Industrial Index’s upward push since US President Donald Trump took office in 2017.

The stock market’s decline marked the transformation of Wall Street into a bear market, as investors grappled with worries about the paralysis of the US economy and a liquidity crisis.

Krosby stressed that if companies cannot raise money to survive, they will go bankrupt.

However, the stock market slump did not last long. Traders found momentum as the US Federal Reserve launched a large-scale asset purchase program and cut lending rates to 0%.

In addition, the US Congress also approved a large-scale stimulus package at the end of March.

April to September: Recovery process

Wall Street’s rally continued in the spring and was further strengthened in the summer, when in August the market nearly returned to pre-pandemic COVID-19 levels.

Factors driving the recovery are the tech giants. From April to September, the share prices of Facebook, Amazon, Microsoft, Apple and Google all increased.

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Operations at the New York Stock Exchange, USA. (Photo: AFP / VNA)

Notably, the iPhone maker’s share price rose more than 80%. According to Krosby, the products and services of these companies are assessed to be suitable with the needs of the market.

In addition, a number of other companies have also had good luck thanks to the pandemic, typically the Zoom video conferencing platform, companies that sell cleaning products to consumers like Clorox and Procter & Gamble, or companies foods like Hormel and Hershey.

November: US Presidential Election – the spotlight

Since September, the stock market has turned its attention to the presidential election, along with an increase in COVID-19 cases and progress in COVID-19 vaccine production.

The results of the presidential election in the US in early November 2020 signaled the end of President Donald Trump’s term and Joe Biden’s inauguration as US President in January 2021.

This did not seem to bother Wall Street as the Dow Jones index closed above 30,000 for the first time in November 24, thanks to optimism about the progress in COVID-19 vaccine production.

Outlook for 2021

The December 2020 approval for COVID-19 vaccine paints a brighter future for the US economy and the stock prices of pharmaceutical companies like vaccine maker Moderna and cashew drug maker. Regeneron treatment. These two companies are expected to have a prosperous new year.

In addition, the share prices of technology companies may also continue to increase as the market becomes more interested in cloud computing, fifth-generation (5G) mobile network technology and artificial intelligence. ./.

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