The U.S. stock market in March finished like a proverbial lamb and leaves uncertainty about whether the pro-growth agenda of U.S. President Donald Trump actually will deliver the economic lift investors have been expecting.
U.S. stocks didn’t rise much in March, in contrast to their rally in January and February. But stocks elsewhere showed strong gains in March.
As talk of President Trump’s possible border tax waned, at least for the short term, international stocks rose. In fact, overseas stocks ended the first quarter of 2016 with higher returns than U.S. stocks.
The S&P 500 returned only 0.10% during March 2016, even though it jumped 6.03% for the first quarter. The Dow Jones Industrial Average lost 0.61% for March but still notched a 5.14% return during the quarter. The Russell 2000 inched up just 0.14% for March and only 2.48% for the quarter.
Bob Carlson, the editor of Retirement Watch, pointed to the All-Country World Index rising 1.23% for March and soaring 6.84% for the first quarter of 2016. In addition, emerging market stocks jumped 2.49% in March and 11.31% for the full quarter, he added.
That performance made emerging market stocks the leaders for both March and first-quarter 2016, Carlson opined.
Bonds were volatile throughout the quarter, Carlson observed. Long-term treasuries lost 0.59% in March but returned 1.42% for the quarter. Investment-grade bonds lost 0.34% in March but still gained 1.22% for the full quarter.
Treasury Inflation-Protected Securities (TIPS) lost 0.10% in March but gained 1.22% for the entire first quarter. High-yield bonds lost 0.33% for March but returned 2.22% for the first quarter, Carlson added.
Energy-related commodities dropped 3.39% in March and 5.19% for the full first quarter. Broad-based commodities lost 3.10% for March but only 2.85% for the quarter. Gold fell 0.83% for March but rode strong gains in January and February to finish ahead 7.35% for the first quarter, Carlson continued.
The just-completed first quarter of 2016 marked the 13th quarter since the bull market began in which the S&P 500 rose more than 5%, according to Bespoke Investment. A pattern is starting to show for a strong quarter to finish with a weak third month, as just occurred in the first quarter of 2016, Carlson observed.
Jim Woods, the editor of Successful ETF Investing, has been championing international funds recently and one of his current favorite recommendations rose 3.4% in the past week. The fast-climbing fund is the VanEck Vectors India Small-Cap Index ETF (SCIF), which now is up 25% since December 12, 2016.
Whether the market will resume its upward trend from January and February could hinge on how the U.S. economy grows, along with jobs and corporate earnings. The April 7 Labor Department announcement of 98,000 new jobs created in March fell well below economists’ consensus expectations but still resulted in an average of 180,000 new jobs per month created in the full quarter.
A weak jobs report in the United States for a single month would need to be followed by a succession of sluggish jobs growth to have much impact on the markets, particularly overseas.
Paul Dykewicz is the editorial director of Eagle Financial Publications, editor of StockInvestor.com and DividendInvestor, a columnist for Townhall and Townhall Finance, a commentator and the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a Foreword by legendary football coach Lou Holtz. Visit Paul’s website at www.holysmokesbook.com and follow him on Twitter @PaulDykewicz.