When the World Health Organization declared COVID-19 a pandemic on 11 March, its director general, Tedros Adhanom Ghebreyesus, said, “This is the first pandemic caused by a coronavirus and we have never before seen a pandemic that can be controlled, at the same time.”
His remarks about COVID-19 turned out to be the beginning of a year of many firsts. Just over half-way through 2020, the financial markets and the world at large have already seen record-breaking occurrences, some that have never been witnessed in history and some that were last recorded decades ago.
The equity markets experienced a coronavirus market sell-off, which began on 19 February through to the low on 23 March, or 22 trading days. It was the fastest drop of more than 30% on record for the S&P 500. The second, third and fourth quickest 30% pullbacks in history all occurred during the Great Depression era in 1934, 1931 and 1929, respectively.
In response, governments and central banks around the world unleashed unprecedented fiscal and monetary stimulus and other support for economies floored by the coronavirus pandemic. The G20 said on 26 March that it was to inject more than $5 trillion into the global economy to limit job and income losses and “do whatever it takes” to tackle the pandemic. This sum equated to close to 6% of an $87 trillion global economy of last year.
The markets rallied through April, making the preceding downturn the shortest bear market on record at just 33 days. Historically, the S&P 500 retests previous lows and hits an even lower price level 60% of the time out of the 25 past bear markets on record. This April also became the stock market’s best month in more than 30 years, with the S&P 500, gaining 12.7% while the Dow Jones and the Nasdaq gained 11.1% and 15.5%, respectively.
On 20 April, the US benchmark West Texas Intermediate crude futures for May 2020 delivery plunged more than 300%, entering deep into negative territory for the first time ever and touching -$40.32 before clawing back to settle at -$37.63 for the day. This meant that sellers were in fact paying buyers to take the oil out of their hands to avoid incurring storage costs.
Responding to the oil prices weighed down by oversupply and further demand suppressed by the pandemic containment measures, one energy giant, Royal Dutch Shell, cut its dividend for the first time in 75 years, since World War II, by two-thirds on 29 April.
While most companies are facing earnings uncertainty and not providing any forward guidance, which is leaving investors in limbo, investors have been cheering Tesla Inc, the electric vehicle maker. Tesla became the world’s most valuable car-maker, overtaking Japan’s Toyota, as the electric vehicle-maker’s stock hit a record all-time high on 10 July. Tesla Inc’s value surpassed $285 billion, which was roughly $80 billion more than Toyota’s market capitalisation on the same day, even though Toyota sold around 30 times more cars last year and its revenues were more than 10 times higher.
2020 has been arguably a great year so far for Tesla Inc. Its founder and CEO Elon Musk is now on record as the highest paid US executive for 2019, with a compensation of around $595 million. According to the Bloomberg Billionaires Index, his fortunes rose on 10 July to more than $70 billion, making him the world’s seventh richest person, and zooming past Warren Buffett, one of the greatest investors of all time.
Also topping Buffet on the billionaire rankings was India’s wealthiest man, Mukesh Ambani. The chairman of Reliance Industries Limited was worth $68.3 billion as of 9 July. While Ambani’s wealth has jumped this year, he was the only Asian tycoon in the exclusive world’s top 10 richest people club in June.
Probably wanting a break from Earth, NASA astronauts Bob Behnken and Doug Hurley were launched by SpaceX Crew Dragon into orbit on 30 May, successfully beginning the company’s first crewed mission into orbit. The launch also represented the first time NASA launched its own astronauts since the end of the space shuttle programme nearly a decade ago. The founder of SpaceX is, of course, Elon Musk.
While other companies are on record for good reasons, German payments giant Wirecard filed for insolvency in the midst of a major accounting scandal linked to a €1.9 billion (US$2.2 billion) cash hole in its financial records. The company’s shares lost close to 98% of their value within days and were temporarily suspended from trading in Frankfurt. The shares are now trading at around €2.65, compared with €104 in May. Some experts have been calling the scandal the ‘Enron of Germany’.
In the US, Luckin Coffee, a Chinese company previously touted as China’s challenger to Starbucks, was suspended for trading on Nasdaq as a result of a 2.2 billion Yuan (US$314 million) revenue falsifying accounting scandal. The share price plunged over 97% from its 52-week high.
In the currency markets, the South African Rand traded at its all-time low at 19.3418 against the US dollar in April. The Rand is one of the currencies most exposed to China, hence any adjustments to Chinese foreign policy has a direct impact on it. South Africa relies heavily on mineral exports, and low commodity prices have also led to a weakening of the Rand. In March, Moody’s downgraded the country’s credit rating from investment grade to junk. The downgrade left South Africa without an investment-grade rating for the first time in 25 years and caused it to fall out of the FTSE World Government Bond Index, which could prompt significant capital outflows while raising borrowing costs and complicating the government’s efforts to narrow any budget gap.
As the demand for transportation fuels plummeted during the pandemic, a Northern Arizona University scientist said that the dramatic decrease in local air pollution and carbon dioxide (CO2) levels above cities has been historic. The International Energy Agency forecast the CO2 impact of the crisis, suggesting emissions could fall by 8% this year and becoming the largest annual decrease in emissions ever recorded.
In sports, Patrick Mahomes signed a record-breaking 10-year deal worth $503 million with the Kansas City Chiefs, making it the largest contract in sports history. The Super Bowl champion and MVP will be in Kansas City through 2031.
In entertainment, a famous Turkish TV personality, Acun Ilicali became the man with the most Instagram live viewers, reaching more that three million viewers and surpassing the two million instant viewers record which previously belonged to rapper Tekashi69 (Tekashi 6ix9ine).
Netflix TV shows ‘Elite’, ‘Stranger Things’, ‘Money Heist’, ‘Sex Education’ and ‘Tiger King’, topped the most watched list with record-breaking viewership.
The recent Black Lives Matter protests against police brutality and systemic racism which erupted over the death of George Floyd and others peaked on 6 June when half a million people turned out in nearly 550 places across the US. Polls, including one released by the Civis Analytics, a data science firm that works with businesses and Democratic campaigns, suggested that an average of 20.5 million people participated in these demonstrations. These figures would make the recent protests the largest movement in US history.
These protests have not just been historic in numbers, as some institutions have started to embrace the call against systemic racism. Notably, Michael Drake became the University of California’s first black president in the public institution’s 150-year history. Students at the Massachusetts Institute of Technology elected Danielle Geathers, a black woman, as president of the Undergraduate Association for the first time in the school’s 159-year history. After 274 years, Princeton University had its first black valedictorian for the class of 2020. And NASA announced on 24 June that the agency’s headquarters building in Washington, D.C., will be named after Mary W. Jackson, the first African-American female engineer at the space agency.
Many other occurrences could make this list, as it is far from exhaustive, but what a record-breaker year it has been so far.
Richard Maparura is a member of the CFA Society of the Cayman Islands.