2019 First Quarter Market Update

Observations

The extremely sharp decline in the fourth quarter of 2018 lasted right up until December 26th, was followed by an equally-vigorous rally in January. That is certainly not the norm, as recoveries from declines of such magnitude typically take four to six-times as long as the declines that preceded them. There’s a saying among market professionals that describes that more-typical of scenarios: ‘Elevator down, escalator up.’

Most risk managers had no sooner adapted their portfolios to these negative conditions, then the market turned around and rocketed right back. This resulted in some portfolios locking in that loss.

That’s why we don’t want to react based on market movements. As you hear us say repeatedly, the best strategy is to invest based on your goals and be disciplined in your investment strategy.

 

Technical Summary:

March Summary:

For the month of March, the Dow rose a scant 0.05%, while the NASDAQ gained 2.6%, and the S&P 500 rose 1.8%. The Mid-Cap S&P 400 and SmallCap Russell 2000 went the other way, declining -0.7% and 2.3%, respectively. In International markets, Canada’s TSX gained 0.6% and the UK’s FTSE rose 2.9%. France’s CAC 40 gained 2.1%, Germany’s DAX added 0.1%, and Italy’s Milan FTSE gained 3%. China’s Shanghai Composite surged 5.1% but Japan’s Nikkei fell -0.8%. Developed International markets as a group gained 0.9%, and Emerging International markets as a group added 1.1%. Precious Metals retreated in March in the face of strength in the equities markets. Gold pulled back -1.3%, and Silver declined -3.3%. The industrial Metal copper declined -0.4%. West Texas Intermediate Crude Oil rose smartly by 5.1%.

First Quarter Summary:

In the first quarter of 2019, the Dow gained 11%, the NASDAQ rose 16%, the S&P 500 gained 13%, and the S&P 400 and Russell 2000 each finished up 14%, capping off the best quarter in nearly a decade. International markets did nearly as well. Canada’s TSX rebounded 12.4% and the UK’s FTSE gained 8.2%. France’s CAC 40 rose 13.1%, Germany’s DAX added 9.2%, and Italy’s Milan FTSE gained 16.2%. China’s Shanghai Composite got the blue ribbon among equity markets by rising 24%, and Japan’s Nikkei gained 6%. Developed International markets as a group added 10.3%, while Emerging International markets as a group rose 9.9%. Gold rose a modest 1.3%, and Silver declined -2.8%. Copper finished ahead by 11.6% for the quarter, and Oil was the big winner among the major commodities, surging 32.4%