Quarter 1 Newsletter - 2019

During the first three months of 2019, investors had a lot to cheer about as U. S. equity markets turned in their best quarterly gains in nearly a decade. This helped many of the major indexes to recoup a good portion of the losses that they suffered in the final months of 2018.

For the quarter, the S&P index rose slightly over 13%, marking its best start to a year since 1998. The Dow Jones Industrial Average (DJIA) advanced an equally impressive higher than 11% for the quarter. Gains for the quarter were broad, and all eleven S&P 500 sectors ended higher for the quarter for the first time since 2004. (Sources: Barron’s 4/1/2019, Wall Street Journal 3/30-31/ 2019)

While many factors contribute to strong equity gains, analysts feel that much of the first quarter’s rally was fueled by investors reacting to the central bank's backing off their previous plan of interest rate hikes in favor of announcing they will not raise interest rates this year. Another major factor cited as a reason behind the increase was the fact that many investors had stepped back into equities after the late 2018 sell-off.

On Friday, March 29, the last business day of the quarter, the yield on a 10-year Treasury U. S. Note finished the day at 2.416%, below the October 2018 peak of 3.25% and the year-end close of 2.684%. The Wall Street Journal reported that for the quarter, yields, which fall as bond prices rise, had retreated around the world in the quarter’s last weeks. While some analysts are saying that the first gain puts equity markets above their 2019 year-end projections, others are quick to point out that indexes are still below the all-time highs reached in 2018. (Source: Wall Street Journal 3/30-31/ 2019)

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