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.
|S&P 500 Composite (Large Cap)
|Russell 2000 (Small Cap)
|MSCI World Ex-Us
|Barclays US Aggregate Bond
S&P 500 April, 2018
Source: Google Finance
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