Market Perspectives

2020 Year in Review

Philip Hergel
Senior Quantitative Analyst

2020 Can't End Fast Enough

Imagine if the 1918 Spanish flu pandemic, the Civil Rights Movement of the 1950s, the 1930s Great Depression, the nightmarishly messy U.S. presidential election of 2000, as well as unprecedented devastation from global natural disasters all occurred in the same calendar year — well, they just did.

2020 will be remembered as the year to forget. It will be remembered for the 1.4 million people (and still counting) who died globally due to COVID-19. It will be remembered as the year of brutal economic turmoil for millions of people who lost their jobs during the pandemic. It will be remembered for the immeasurable anguish of Black people being killed by police officers and the increasing awareness of the Black Lives Matter movement across America. It will be remembered for the uncontrollable raging wildfires around the world and the most active hurricane year on record. It will be remembered for the attack on American democracy as the presidential election results were disputed, litigated, and doubted by millions of Americans. There is no negative adjective strong enough to describe how bad 2020 was. If 2020 were a drink, it would be a colonoscopy prep. Good riddance 2020…bring on 2021! 

To read more download a PDF of our Year in Review.

Coronavirus Market Outlook

Last month we shared our thoughts on the outlook for the global economy and financial markets as the spread of COVID-19 was exploding around the world. Events have continued to unfold at a frenzied pace.  At times like this, it’s important for investors to not overreact, but remain objective and thoughtful, while also being nimble enough to act if conditions warrant action. Zevin Asset Management’s guiding principle has always been to invest in high quality securities that can endure during times like these, in an attempt to minimize major losses in our clients’ portfolios. To that end, we are closely monitoring this global health crisis, the numerous policy responses and financial market reaction, all within our longstanding investment process of assessing the macroeconomic, company and ESG risks.

A Tale of Two Sectors

2019 played out to be a year of extreme dichotomy in the U.S. and to a lesser extent the rest of the world. On the one hand, consumer confidence remained high and consumers continued to spend their growing wages, thanks to extremely low unemployment and rebounding real estate activity. On the other hand, the manufacturing sector fell into recession during the year as the global slowdown spread and intensified, and trade tensions continued to beat down manufacturers’ confidence (see Chart 1). To counteract the slowing economy and prolong the economic expansion, central banks worldwide provided huge amounts of monetary stimulus by cutting interest rates. The U.S. Federal Reserve cut policy rates three times in 2019, helping to right the inverted yield curve and, so far, appearing to have successfully avoided an economic hard landing. Likewise, a total of 35 central banks globally eased monetary policy in 2019.