New Capital Market Insights White Paper: Bear Markets, Black Swan Events and Volatility

The first part of this year has been challenging for the equity markets. With a global pandemic suddenly arising—the likes of which have not been seen in more than 100 years—U.S. economic activity largely halted, and unemployment skyrocketed, reaching in excess of 40 million initial unemployment claims in just 10 weeks. By some estimates, the gig economy, or “1099 workforce,” comprises an additional 20 million people.

Will the economy experience a V-shaped recovery and quickly bounce back or is the recovery likely to be a long, protracted U-shape? That remains a key question. One thing is clear though, life in the time of corona is currently very challenging for people, the economy, and the markets—and much is uncertain.

The sudden appearance of a severe global pandemic is just the most recent example of a “black swan event” roiling the markets. By definition, black swans are rare and seldom seen, and as such are difficult, if not impossible, to predict. They can be triggered by either unexpected market, economic, or external factors such as geopolitical, war, or terrorist events.

In our new Capital Insights report we examine in detail bear markets, black swan events, and volatility to gain some perspective on how the recent—or current?—bear market compares with historical periods.

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