22 Apr Quarterly Letter to Clients – April 2019
Following a tumultuous end to calendar year 2018, equity markets rebounded during the first quarter of 2019, with the S&P 500® posting its strongest 3-month opening since 1998. Global equity markets rallied, with the U.S. leading the way. Double-digit quarterly returns were achieved broadly, as the S&P 500®, the Dow Jones Industrial Average, NASDAQ, and the Russell 2000® recorded results of 13.65%, 11.81%, 16.49% and 14.58%, respectively. Market strength was fueled mainly by an increasingly dovish tilt in Federal Reserve (Fed) commentary, apparent progress in U.S.-China trade talks, and the ending of the government shutdown.
Along with the strongest quarterly opening, March also marked the 10-year anniversary of the bull market which began in March 2009 following the severe financial crisis in 2008 and subsequent unprecedented monetary policy by the Fed to stimulate growth. Accompanying this rise has been the second longest economic expansion since 1990, which might best be described as progress similar to that of a healthy tortoise – slow but steady.
An important indicator of the health of the economy is gross domestic product (GDP), which measures the nation’s total production output. The U.S. GDP growth rate is expected to remain between 2% and 3% in the months ahead. While weakness overseas poses a possible stumbling block for growth of the economy and corporate earnings in the U.S., it also reduces pressure on the Fed to hike interest rates, a letup that could help prolong current business strength as all eyes are on the talks with China as leaders negotiate a trade agreement. Although uncertainty hanging over markets is real, we remain disciplined in our approach to the market and continue to maintain well-diversified portfolios.
As we note our 50th year in business, we continue to work diligently in the best interest of our clients every day, just as we did when we opened our doors in 1969. We proudly look forward to serving you and your families for many years to come.
Peter J. Connors, CFA
Important Disclosure Information
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Connors Investor Services, Inc. (“Connors”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Connors. Please remember to contact Connors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Connors is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of the Connors’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.
Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your Connors account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Connors accounts; and, (3) a description of each comparative benchmark/index is available upon request.