Market Beat: Second quarter rebounds in time
The second quarter of this year has just closed and was a good one for the markets.
May was a rough month for stocks due primarily to the trade war fears. In the month of May, the S&P 500 was down -6.58%, the Dow Jones Industrial Average dropped -6.69% and the NASDAQ fell -7.93%.
The markets rebounded well in June. The G-20 summit was held over the weekend and the results were good, it looks like there will be no further tariffs for the time being and the market’s response to that news was positive. The S&P 500 hit a new all-time of 2,977.86 on Monday, July 1, following the G-20 meeting of the leaders from the largest economies in the world.
So far 2019 has been a good year for stocks and other asset classes, too. Year to date as of July 1, the S&P 500 is up 17.35%, the Dow Jones Industrial Average is up 14.03% and the NASDAQ has posted a gain of 21.19%. In the second quarter, the S&P 500 rose 4.49%, the NASDAQ moved up 4.79% and the Dow rose 3.43%.
Foreign stocks have also preformed well. The EAFE which stands for Europe, Asia and the Far East is up 11.77% year to date and 3.03% for the second quarter and the Emerging Markets are up 9.24% year to date and 0.92% for the second quarter.
Bonds and commodities have also been strong as it appears that the FOMC may be done with interest rate increases and could consider a rate cut at their next meeting at the end of this month. The long-term US Treasury bond fund, TLT has a year to date gain of 10.48% and rose by 5.61% in the second quarter. Gold is also having a good year, GLD, the gold ETF is up 9.86% year to date and gained most of that in the second quarter with a rise of 9.27%. Crude oil has been rallying this year, too, USO which is the crude oil ETF is up 24.64% year to date but has fallen somewhat in the second quarter with a drop of -2.51%.
Looking ahead it should be an interesting year. Hopefully the trade war fears are behind us now, but conflicts could return. Earnings reporting for the second quarter will get going in a few weeks and the outlook for corporate earnings is optimistic.
Kenneth Roberts is a Truckee-based Registered Investment Advisor. Information is at his blog at http://www.sellacalloption.com or 775-657-8065. The mention of securities should not be considered an offer to sell or solicitation to buy investments mentioned. Consult your investment professional to understand the risks and/or how the purchase or sale of these investments may be implemented to meet your investment goals. Past performance is no guarantee of future results.