thependulumswings

Friends

After a terrible 4^th quarter of 2018 where we saw
that worst December for stocks since the 1930’s, market participants were the
recipient of a stellar 1^st quarter of 2019. After the Dow had tumbled
nearly 10 % just in December, highlighted by a 2.35% drop on Christmas Eve
alone, we saw the new year begin with a more than 2% drop on January 3^rd.
 Needless to say the psyche of investors was challenged at that point.
But, from that moment on stocks began to recover and over the next three months
we erased Decembers losses. We haven’t yet made it to new highs but at least
some of the bad taste left in the mouths of investors from Q4 2108 has been
washed away.

On this final trading day of the quarter, the Dow Jones
Industrial Average was up 211 points to close at 25,928. The S&P 500 was up
18 points to finish the day at 2,834. Gold was up $1 to trade at $1,296 per
ounce, while oil was up $.91 to trade at $60.21 per barrel WTI.

It was a great 1^st quarter for both stocks and
bonds, but as we look into the 2^nd quarter of the year we face some
challenges. The yield curve has inverted and economic slowdown appears to be at
hand. We will be entering an interesting earnings season over the next 30 days,
one that comes with lowered expectations and much angst. The Fed is firmly in
the dovish camp now, but that comes with concerns of its own with regards to
the Fed’s views about the economy going forward. But, as we have seen in recent
years TINA might come back in play, where stocks are the only game in town. For
now, let’s enjoy the quarter that is now in the books and be ready to get back
at it next week.

Have a great weekend everyone.

Jim