The outlook of the US technology sector

Following its peak on February 19, the S&P 500 reached a bear market in a record-breaking 16 days.

Few would have expected a pandemic to be the end of the world’s longest running bull market. It was the epitome of a black swan event: a rare and unexpected occurrence with severe consequences.

The COVID-19 crisis is unique in many ways and nobody can know what will happen until it has happened. Still, if you look at history, you’ll notice an interesting pattern in black swan events.

While the declines can be sharp and severe, many historic ones only lasted a couple of months. These include the Iranian Hostage Crisis, 9/11, SARS, the intervention in Libya, and Brexit. The events with slower recovery times like the Oil Embargo, Black Monday, and the GFC were exceptions, rather than rules. Eventually, the market recovered after those events too.