After an extended period of volatility, markets were reasonably calm during the first quarter of the year. Stocks generally continued their steady climb, as the economy remained strong. The S&P 500 Stock index and Dow Jones Industrial Average rose 10.6% and 6.1% respectively. Employment data continued to confirm strong demand for workers.
Inflation remained a concern, as the Federal Reserve held interest rates steady, defying the expectation that interest rates would be reduced. Longer-term interest rates have moved modestly higher due to inflation expectations and the increased treasury financing that will be required to fund the government deficit.
Many investors remained skeptical of equities and continued to hold large cash balances. Bond funds experienced large cash inflows, as higher interest rates made fixed income securities more attractive.
For our part, we will hold a steady course and continue to look for investment opportunities.
As always, I welcome your comments or questions.
Bill