Commentary

Q1 Market Recap
Stocks and bonds rebounded strongly in the quarter fueled by lowered interest rate expectations. The global economy likely grew during the quarter, buoyed by demand from the U.S. consumer and China’s reopening. Data suggests we are not in a recession yet, but higher interest rates appear to be slowing down the economy as intended by Central Bank policymakers. Uncertainty remains in the banking sector following the failure of Silicon Valley Bank and Signature Bank, yet panicked depositor behavior seems to have abated. While the S&P 500 posted a strong return for the quarter, gains were driven by a handful of mega cap tech companies such as Apple, Microsoft, Google, Amazon, and NVIDIA. On an equal weighted basis, the S&P 500 was up 2.89%. Foreign equities continued to outperform, aided by a weaker U.S. dollar and better than expected corporate earnings.

Bonds rallied to start the year as investors became increasingly convinced the Fed will pause hiking rates this quarter. Junk bonds outperformed investment grade and municipals. The yield curve remains inverted, albeit at a smaller spread than observed earlier in the year. Publicly traded REITs continue to struggle facing an uncertain interest rate environment and hybrid workplace policies. Gold prices rose during last month’s market volatility.