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Happy April Fool’s Day.  If only the picture of the futures market right now were a prank, but those numbers are real (at least for now).  After a month-end rally tied to rebalancing, US futures are kicking off the new quarter on a down note as comments from the President last night that his administration now expects 100K – 240K deaths from the COVID-19 outbreak under a best-case scenario has really spooked investors.  While those estimates are no doubt concerning, we would reiterate the point we have been making for some time now that the headlines are going to get a lot worse in the days and weeks ahead, so this shouldn’t be a major surprise.

Read today’s Bespoke Morning Lineup for a discussion of the latest trends and statistics of the outbreak, overnight moves in the market, and our updated state by state summary of the latest COVID-19 trends in the United States.  One notable trend of the summary is that in the state of New York, 1% of the entire population has now been tested.

The S&P 500 is poised to open down over 3.5% this morning and if those numbers hold through the close it would be the 2nd worst start to a quarter in the history of the S&P 500.  The only one that was worse was the first trading day of 1932 when the S&P 500 kicked off the quarter with a decline of 6.9%.  The only other quarter besides that where the S&P 500 declined more than 3% was in October 1998 during the Russian debt crisis and the collapse of the hedge fund Long-Term Capital Management.

Hopefully, this quarter’s weak start isn’t a sign that we’re in for more of the same in Q2 as we saw in Q1 and March.  For starters, the S&P 500’s average daily change during the month of March was 4.8% which ranks as the most volatile month in the history of the S&P 500 (first chart)!  Second, with a decline of 20% during the quarter, the S&P 500 had its worst quarter since Q4 2008 and just the 9th 20%+ decline on record (second chart).