Market Perspective for March 30, 2019

Equities rallied to end one of the strongest quarters in years. The S&P 500 Index gained 1.20 percent on the week and finished the quarter with a return of 13.58 percent.  The NASDAQ gained 1.13 percent on the week to finish the quarter with a 16.49 percent advance. The Dow Jones Industrial Average and Russell 2000 have increased 11.15 percent and 14.18 percent year-to-date, respectively.

Dividend funds came on strong as interest rates fell in March. iShares Edge Minimum Volatility ETF (USMV) advanced 12.69 percent and Vanguard Dividend Appreciation (VIG) climbed 12.46 percent. After March 18, USMV and VIG bested SPDR S&P 500 (SPY) by 1.0 and 0.60 percentage points, respectively.

Technology was the best performing sector over the past 3 months. SPDR Technology (XLK) advanced 19.52 percent. iShares Expanded Tech Software (IGV) and iShares Semiconductor (SOXX) climbed 21.50 percent and 21.16 percent, respectively.

SPDR Energy (XLE) returned 16.20 percent, though the gains came iin the first 6 weeks of the year. Strength in energy and technology boosted the solar sector. Invesco Solar (TAN) rose 24.85 percent. SPDR Industrial (XLI) rallied 17.16 percent.

Economic data was solid. The University of Michigan reported an increase in consumer confidence. New home sales jumped to an annualized pace of 667,000 in February, much higher than forecasts and January’s pace. Weekly jobless claims fell to 211,000, below estimates and one of the lowest totals over the past several weeks.

The U.S. Dollar Index gained 0.72 for the week and 2.3 percent year-to-date. The pound and euro sank as the Brexit debacle continues.

Investors were unimpressed with Apple’s (AAPL) shift towards additional services. It unveiled a streaming media service called Apple+ and a credit card within its Apple Pay app. They also created an Apple News service.   The stock returned 0.58 percent for the week.

Earnings reports were largely positive this week. Lululemon (LULU) advanced 14.43 percent on strong earnings and CarMax (KMX) climbed 13.26 percent. Homebuilders Lennar (LEN) and KB Home (KBH) advanced 6.34 percent and 2.61 percent, respectively.

Crude oil gained more than 2 percent on the week, while natural gas slumped nearly 4 percent. Palladium dropped more than 11 percent after increasing substantially in 2019.

 

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