The Oil Price War and Coronavirus: What Does it Mean for Bond Returns?

March 10, 2020 | , , Greg Leonberger, FSA, EA, MAAA, FCA, Director of Research, Managing Partner

This weekend’s clash between Saudi Arabia and Russia at the OPEC meeting launched an oil price war that saw prices plummet over 20% with oil now trading at approximately $35 per barrel. This is salt on the wound for the global markets as coronavirus cases roughly tripled last week in the U.S., Europe, and the rest of Asia outside of China. Somewhat predictably, the S&P 500 suffered its biggest drop yesterday (March 9th) since 2008, dropping 7.6%; this was the 19th largest drop in its history.

This newsletter updates investors on yesterday’s market turbulence and in particular provides a projected outlook for core bonds’ expected returns in 2020. While the path forward from yesterday is unknown, the analysis included should hopefully provide investors some guidance on potential paths and returns for the remainder of the year.

Read > The Oil Price War and Coronavirus: What Does it Mean for Bond Returns?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.