January 1st Through March 31st, 2016.
If you had just fast forwarded to March 31st, you may have thought that the first 90 days of 2016 were fairly smooth sailing, with World markets showing very little change from New Year’s Eve to the end of March.
What we all experienced was quite a bit different of a reality; however, with the first 10 days of 2016 being the worst ever start to a new year in the US stock market. But by mid-February most asset classes had bottomed out, and the early quarter panic looked to be an overreaction. Markets simply seemed to be continuing what they had been doing since the end of 2014 to one degree or another.
For the quarter, Emerging Markets & Real Estate seemed to be the strongest asset classes, rising 5.8% & 5.1% respectively. Fixed Income fared well, but the US equity market was mostly flat or down, with the S&P up about 1.3% while the NASDAQ fell by 2.4%. Overall, Global Markets (as measured by the MSCI All Country World Index) advanced only 0.24% for the quarter, bringing its 1 year return to -3.8%.
The US continues to grow slowly, and in a sign of Déjà vu, the 1st Quarter GDP’s initial reading came in at 0.5% annualized growth. This follows much of the pattern for the first quarters of the year since 2014, and continues the slow growth we have seen over the last seven years.
After the Federal Reserve raised interest rates by a Quarter point in December, they kept them steady in their January & March meetings at a target of 0.25 – 0.50%. This added some relief to markets, but also indicated the Fed was not Confident about the Strength of the economy. While most economists believe GDP will continue to grow anemically (a word I have been using far too often for far too long), there remain doubts about an actual recession anytime soon and economic activity is expected to be better for the remainder of the year.
