The first half of 2020 has seen many unprecedented events, both in terms of the impact on society from the COVID-19 pandemic as well as the resulting extreme movements in risk assets. The year began on a relatively optimistic tone as US equity markets marched toward all-time highs in February, aided by tailwinds from stable economic conditions, an accommodative Federal Reserve, and substantive progress on the US-China trade dispute.

May marked another month in the recovery of risk asset prices following the declines in February and March. Investors continued to be optimistic regarding the potential for a COVID-19 vaccine as well as the resumption in economic activity as stay-at-home orders and business closures were relaxed. Despite the unprecedented decline in the US economy that is still unfolding, US equities, as measured by the S&P 500 index, rose 4.8% during the month and are now down just 5.0% for 2020 and 10.1% below their all-time closing high of 3,386 set on February 19.

After a difficult first quarter of 2020 for investors, April provided a much-needed reprieve as markets rallied sharply. US large cap equities, as measured by the S&P 500 index, had their best month in decades returning nearly 13%. Investors appeared optimistic that the significant stimulus provided by governments and central banks, lower energy prices, and evidence of potential new treatments for the COVID-19 virus could result in a swift recovery.