April 2018 Market Insight

May 1, 2018

Volatility Strikes Back

With April now behind us, the S&P 500 is just about even from the beginning of the year, but what a ride it has been! January gave us the “Melt Up” of over 7%, February brought a correction, and March was a whipsaw of trade concerns and inflation fears. It seems April was more of the same (see chart).

The month started off in a free fall with continued trade war concerns and an untimely Twitter attack by President Trump targeting Amazon. Facebook added to the drama as a data breach was announced and CEO Mark Zuckerberg was called to testify before Congress. Attention quickly moved to earnings season and investors have not been disappointed. J.P. Morgan’s David Kelly, speaking on CNBC’s Closing Bell said that this earnings season is “about as good as it gets.” 1

For the time being, North Korea tensions have decreased and the Michael Cohen drama has subsided, at least temporarily. We’re keeping an eye on the 10yr-2yr yield curve (more on that next month) as it continues to flatten. There is a path to a continuing stock rally, but we need to see continued growth and an orderly rise to inflation.

We hope you enjoy some warmer days in May as you prepare for the summer.

Index   March   YTD 2018
S&P 500 Composite (Large Cap) 0.38%-0.38%
Russell 2000 (Small Cap)  0.86%0.78%
MSCI World Ex-Us2.30%0.21%
Barclays US Aggregate Bond-0.74%-2.19%


S&P 500 April, 2018
S&P 500 April 2018

Source: Google Finance
1: https://www.cnbc.com/2018/04/27/this-earnings-season-is-about-as-good-as-it-gets-j-p-morgans-david-kelly.html


This market update should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Whitcomb & Hess, Inc. is registered as an investment adviser with the SEC. The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's portfolio. There are no assurances that a portfolio will match or outperform any particular benchmark.

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