Investment Commentary – April 1, 2015
Dow – 17,776.12 (3/31/15 close)
S&P 500 – 2,067.89 (3/31/15 close)
10-year Treasury – 1.93% (3/31/15 close)
- Stocks tumbled yesterday and gave back some of the gains from the previous 2 sessions as Wall Street closed out a volatile 1st quarter with mixed results. The volatile 1st quarter saw the major indexes bounce in and out of positive territory. In March alone, the Dow posted triple digit moves up or down in 16 of the month’s 22 trading sessions.
- Stocks have faced pressure from a rising dollar, falling oil prices and uncertainty about the timing of an expected interest rate hike from the Fed.
- The U.S. Federal Reserve may begin raising interest rates as early as June 2015. This has raised questions about the potential impact on U.S. stocks. Based on the performance of the S&P 500 index, equity returns were positive in each of the past 5 rate-hike cycles.
- Analysts believe the Fed’s current objective to increase interest rates without adversely affecting economic growth could favor equities and other economically sensitive securities more than in past rate-hike periods.
- Analysts still favor stocks over bonds.
- Investors should not write off Europe despite recent negative headlines. Many of the strongest global brand names headquartered In Europe are now undervalued. The euro’s decline against the U.S. dollar is likely to help European exporters.
- In fixed income analysts like corporate bonds, mortgage backed securities, and select European bonds.
The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.