The 2020 Market Madness

SIFMA Insights Spotlight: A Look at Dow Jones Milestones & S&P 500 Intraday Swings

The emergence of the global pandemic COVID-19 in the first quarter of 2020 caused severe economic and capital markets shocks. This turmoil was evidenced by sharp price declines, yet spikes in volumes, in equities markets. Volatility levels, as measured by the VIX, remain higher than normal (averages): 31.22 for 1Q20 (+103%), 34.49 for 2Q20 (+124%), 27.22 in July (+77%) and still elevated in August at 23.04 (50%) versus 15.39 in 2019. Volumes also remain elevated (ADV): 11.0 billion shares in 1Q20 (+56%), 12.4 billion shares in 2Q20 (+76%), 13.3 billion shares in June (+89%) and still increased in July at 10.6 billion shares (+50%) versus 7.0 billion shares in 2019.

Despite continuing economic uncertainty equity markets continue to perform well, in terms of both rising index prices and functioning efficiently. From a market structure perspective, markets remained open and functioning. The financial system and market infrastructure have been very resilient, withstanding record high turbulence, not just as measured by volatility but extreme 1,000 point intraday price swings in the Dow. While the general trend in index prices has been up, market participants expect market metrics to ebb and flow with each economic report or update on developing a virus vaccine, whether positive or negative news.

In this report, we analyze a few signs of market madness through the peak of the COVID-19 related market turmoil.


Katie Kolchin, CFA
Director of Research
SIFMA Insights