Market Insights - April 2019
Markets roared back in the first three months of the year, erasing the losses of 2018 and more.
Although the S&P 500 posted the best first quarter since 1998 and the best quarterly performance since third quarter 2009, many fearful investors shunned stocks, pulling $5.6 billion from equity funds and funneling over $94 billion into bonds, even as interest rates fell. In this environment, our clients’ globally balanced investment approach did well.
The S&P 500 posted three consecutive monthly gains, adding 13.65% year-to-date, with only three negative weeks in the entire quarter. All eleven S&P sectors were up; technology, real estate and industrial stocks were the strongest performers. International assets participated in this rebound as well; developed markets added 9.98%, emerging market stocks rose 9.91%, emerging market bonds 7.42% and the global aggregate bond index gained 2.20%.
This year has seen a major shift in monetary policy, The Fed indicated that, given the changes in economic conditions, further interest rate rises could be put on hold for the rest of 2019. The U.S. ten-year treasury finished the quarter with a yield of 2.41%, down from its 2019 high of 2.79%. Driven by this favorable development, bond prices rallied, with the U.S. aggregate bond index adding 2.94% and the high yield bond index 7.26% year-to-date.
Ten years ago, on March 9, 2009, financial markets had fallen to their lowest point. Investor sentiment was crushed, and the prevailing outlook for recovery seemed dim and hopeless. Now, a decade later, the stock market has gained 417%, an annualized return of 17.76%, and steadfast investors have participated in the longest-running bull market in S&P 500 history. Of note; there have been 30 years since 1938 where both January and February have been positive; in 29 of those years the market finished the year in positive territory.
We also want to note several events that we will be speaking at or supporting in April and May, beginning with St. Gregory’s golf tournament on April 13th, Rainbow of Rhythm on April 12th and 13th, Sun City sewing club on May 1st, “Bodacious Broads” bowling team May 2nd, Sun City Women’s Tennis “Derby Day” on May 4th, and Sun City ROMEO men’s club May 15th.
We will also be presenting our “Top Income Strategies” workshop on May 21st, from 9-11am at Pinckney Hall in Sun City. We would like to extend an invitation to join us for breakfast and a presentation of income strategies for 2019 and beyond.