Market Review – March 2020

In this month’s Market Review, our Chief Options Specialist, Jason Ayres, reflects on the March market and provides his predictions for what’s to come in the second quarter of 2020.

February was a challenging month for investors as U.S. and Canadian stocks suffered the fastest correction in history due to fears of the Coronavirus.

Markets bounced the first few days in March with as much upside volatility as there was down the previous week, thanks to what is referred to as a “relief rally”.

The more the global market sold, the greater the potential support from G7 leaders and relief in the form of interest rates adjustments. And with markets oversold, markets snapped back as short sellers bought to cover and investors bought the dip in Fear of Missing Out (FOMO).

The reality, however,  is that the G7 took no action, the Feds cut 50 basis points in an emergency rate cut, and investors sold the news taking the half-point rate cut as evidence that the situation was worse than anticipated.

At present, the roller coaster ride continues as the market bounces once again. This is typical in an uncertain market environment.

Have we reached the bottom yet? At Learn-to-Trade, we don’t believe so. The degree of impact COVID-19 will have on the global economy has yet to be determined as there is still room for more surprises and further downside.